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

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  • Eppelsheimer, Johann
  • Möller, Joachim

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.

Suggested Citation

  • Eppelsheimer, Johann & Möller, Joachim, 2019. "Human capital spillovers and the churning phenomenon: Analysing wage effects from gross in- and outflows of high-skilled workers," Regional Science and Urban Economics, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:regeco:v:78:y:2019:i:c:s0166046218304745
    DOI: 10.1016/j.regsciurbeco.2019.103461
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    Citations

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    Cited by:

    1. Eppelsheimer, Johann & Jahn, Elke J. & Rust, Christoph, 2022. "The spatial decay of human capital externalities - A functional regression approach with precise geo-referenced data," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    2. Feng, Qiyun & Chen, Zhenhua & Cheng, Chuanchao & Chang, Haiqing, 2023. "Impact of high-speed rail on high-skilled labor mobility in China," Transport Policy, Elsevier, vol. 133(C), pages 64-74.
    3. Eppelsheimer, Johann & Rust, Christoph, 2020. "The Spatial Decay of Human Capital Externalities - A Functional Regression Approach with Precise Geo-Referenced Data," IAB-Discussion Paper 202021, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    Regional concentration of high-skilled workers; Churning; Brain gain; Brain drain; Human capital externalities; Internal migration; Wages;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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