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Modelling the flow of knowledge and human capital: a framework of innovative capital

d'Artis Kancs and Pavel Ciaian

International Journal of Public Policy, 2011, vol. 7, issue 1/2/3, 134-160

Abstract: Recently, the EU Council adopted a new labour migration policy instrument – the EU Blue Cards (BC) – for attracting the highly skilled workers to the EU. The present paper examines the potential impacts, which BC may cause on less developed sending countries (LDC). Our results suggest that the EU BC will reduce human capital in LDC. In addition, BC will also have a negative impact on knowledge capital. These findings suggest that without appropriate policy responses, BC makes developing country growth prospects rather bleak than blue. Therefore, we propose and analyse alternative migration policy instruments for LDC. We find that policies implemented on the demand side of the skilled labour market are the most efficient. In contrast, policies that address the supply side of the skilled labour market are the least efficient, though they might be less costly to implement.

Keywords: knowledge capital; human capital; high-skill migration; innovative capital; economic growth; knowledge flow; EU; Council Directives; European Union; labour migration; migration policies; Blue Cards; European Labour Cards; conditions of entry; conditions of residence; third-country nationals; highly qualified employment; skilled workers; less developed countries; sending countries; policy responses; developing countries; growth prospects; policy instruments; demand side; labour markets; supply side; efficiency; implementation costs; public policy; economic policies; alternative paradigms. (search for similar items in EconPapers)
Date: 2011
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Handle: RePEc:ids:ijpubp:v:7:y:2011:i:1/2/3:p:134-160