Human capital spillovers and the churning phenomenon: Analysing wage effects from gross in- and outflows of high-skilled workers

Johann Eppelsheimer and Joachim Möller

Regional Science and Urban Economics, 2019, vol. 78, issue C

Abstract: The article estimates human capital externalities on wages originating from internal gross migration flows of high-skilled workers. We draw on rich administrative micro panel data that allow us to disentangle externalities from sorting and labour market supply and demand effects through an extensive set of time-varying fixed effects. We show that regional inflows and outflows of high-skilled workers occur simultaneously and that both are positively correlated. Given the existence of such a churning phenomenon, looking only at net migration flows might be misleading. Our econometric analysis indicates that inflows of high-skilled workers increase the wages of locals, whereas outflows decrease those wages. Although externalities from outflows outweigh those from inflows in the short run, the opposite holds in the long run. Our results suggest that human capital externalities are transmitted through the productivity effects of local personal networks, which, for newcomers, develop over time.

Keywords: Regional concentration of high-skilled workers; Churning; Brain gain; Brain drain; Human capital externalities; Internal migration; Wages (search for similar items in EconPapers)
JEL-codes: D62 J24 J31 O15 R10 R23 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:78:y:2019:i:c:s0166046218304745

DOI: 10.1016/j.regsciurbeco.2019.103461

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