The prospect of migration, sticky wages, and 'educated unemployment'

C. Simon Fan and Oded Stark

No 9, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: An increase in the probability of work abroad, where the returns to schooling are higher than at home, induces more individuals in a developing country to acquire education, which leads to an increase in the supply of educated workers in the domestic labor market. Where there is a sticky wage-rate, the demand for labor at home will be constant. With a rising supply and constant demand, the rate of unemployment of educated workers in the domestic labor market will increase. Thus, the prospect of employment abroad causes involuntary 'educated unemployment' at home. A government that is concerned about 'educated unemployment' and might therefore be expected to encourage unemployed educated people to migrate will nevertheless, under certain conditions, elect to restrict the extent of the migration of educated individuals.

Keywords: The prospect of migration; Sticky wages; 'Educated unemployment'; Government intervention (search for similar items in EconPapers)
JEL-codes: E24 F22 J24 O15 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The Prospect of Migration, Sticky Wages, and “Educated Unemployment” (2011)
Working Paper: The Prospect of Migration, Sticky Wages, and "Educated Unemployment" (2011)
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