Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306062 
Year of Publication: 
2022
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment Journal [ISSN:] 1864-6042 [Volume:] 16 [Issue:] 1 [Year:] 2022 [Pages:] 73-89
Publisher: 
De Gruyter, Berlin
Abstract: 
This article studies the implications of highly skilled labor international migration in a two-country dynamic stochastic general equilibrium model. The model considers three types of workers: Science, Technology, Engineering, or Mathematics (STEM) workers, non-STEM college educated workers, and non-college educated workers. Aggregate productivity in each economy is a function of innovations, which can be produced only by STEM workers. The model predicts (i) the existence of a wage premium of STEM workers relative to non-STEM college educated workers, (ii) the skill wage premium is higher in the destination country and increases with positive technological shocks, (iii) a reduction in migration costs increases output, wages, and total labor in the destination country, with opposite effects in the country of origin, and (iv) high skilled immigrants reduce skilled native labor and do not affect unskilled labor. Finally, a migration policy designed to attract STEM workers generates similar effects to a positive aggregate productivity shock.
Subjects: 
dynamic stochastic general equilibrium models
innovation
labor migration
migration policy
STEM workers
JEL: 
F43
J61
O31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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