Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121849
Authors: 
Kreickemeier, Udo
Wrona, Jens
Year of Publication: 
2015
Series/Report no.: 
DICE Discussion Paper 200
Abstract: 
We develop a model to explain two-way migration of high-skilled individuals between countries that are similar in their economic characteristics. High-skilled migration results from the combination of workers whose abilities are private knowledge, and a production technology that gives incentives to firms for hiring workers of similar ability. In the presence of migration cost, high-skilled workers self-select into the group of migrants. The laissez-faire equilibrium features too much migration, explained by a negative migration externality. We also show that for sufficiently low levels of migration cost the optimal level of migration, while smaller than in the laissez-faire equilibrium, is strictly positive. Finally, we extend our model into different directions to capture stylized facts in the data and show that our baseline results also hold in these more complex modelling environments.
Subjects: 
International Migration
Skilled Workers
Positive Assortative Matching
JEL: 
D82
F22
ISBN: 
978-3-86304-199-1
Document Type: 
Working Paper

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