Global competition for attracting talents and the world economy

We examine the effects of a worldwide liberalization of high-skilled migration on the spatial distribution of income. Using Gallup survey data, we first identify the origin and preferred destination of all college-educated potential migrants in the world. The analysis of this database reveals that Europe has been less effective than the US in mobilizing its potential high-skilled labor force, but is also globally less attractive. Hence, a fierce competition for attracting talents would have a limited impact on the income gap between the EU15 and the US, and would be more beneficial for Canada and Australia. European countries such as Austria, Belgium, Germany, Greece, Luxembourg and the Netherlands are less attractive and would see their income gap with the US increasing. We also show that liberalizing highskilled migration would decrease income per worker in the developing world by 4.0 percent to 6.7 percent, although we account for a positive effect of skill-biased migration prospects on education decisions.

Docquier,F., Machado, J. "Global competition for attracting talents and the world economy" Ferdi Policy brief  B104, October 2014

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