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Emigration of Highly Skilled Labor: Determinants & Impacts

Driouchi, Ahmed and Boboc, Cristina and Zouag, Nada (2009): Emigration of Highly Skilled Labor: Determinants & Impacts.


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This is an additional contribution to the large body of literature developed in the area of economics of skilled labor migration. It focuses on two major objectives that are the determinants of the migration and its likely impacts on developing economies. Within the framework of the new economics of skilled labor migration, this research has attempted to test empirically the relevance of some components of the most recent new economic models of skilled labor migration. Using available data from international organizations (World Bank, OECD, UNESCO…) and others, in both regressions analyzes and economic simulations, hypotheses have been tested and directions of empirical results identified for larger policy discussions. The theoretical models that have been given priority in these empirical investigations are mainly those of Beine & al, Stark (2005) & al, N. Duc Thanh (2004) and M. Schiff (2005). A major focus has been placed on the models suggested by Duc Thanh (2004) where useful specifications of the functional forms were made. This selected framework uses the similarities that have been observed between this model and that of Stark and Schiff.

The empirical results that have been obtained confirm the role of relative wages, the availability of better opportunities such as jobs, the importance of the living conditions as well as the existence of more attractive working conditions in destination countries relative to source economies. Concerning the estimation of the impacts of skilled labor migrations for both developed and developing economies, the specifications have followed Beine, Stark and Duc Thanh models with special emphasis placed on this latter. Given the dynamic nature of Beine’s model and with the limits on the available time series, significant empirical results are obtained and tests of Beine’s propositions achieved. The regressions results using the subcomponent of the knowledge economic index have shown significantly the effects of both domestic education and the attractiveness of foreign relative wages as major determinants that support the explanation of the level of knowledge added by the tertiary sector in each economy. In the sense of these estimations, it appears clearly that any economy is under two major opposite effects. On one hand, there is the relative share of investment in education that affects positively the human capital formation in any country but with higher impact in developing economies. On the other hand, there is the magnitude of the relative wages that negatively affect the performance of developing economies as measured by the subcomponent of the knowledge economic index. These results have been first confirmed through regression analysis.

These preliminary findings suggest that local, national, regional and international economic policies consider the new theoretical and empirical trends shown so far by these results.

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