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How admitting migrants with any skills can help overcome a shortage of workers with particular skills

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  • Stark, Oded
  • Byra, Lukasz

Abstract

A country that experiences a shortage of workers with particular skills naturally considers two responses: import skills or produce them. Skill import may result in large-scale migration, which will not be to the liking of the natives. Skill production will require financial incentives, which will not be to the liking of the ministry of finance. In this paper we suggest a third response: impose a substantial migration admission fee, “import” fee-paying workers regardless of their skills, and use the revenue from the fee to subsidize the acquisition of the required skills by the natives. We calculate the minimal fee that will remedy the shortage of workers with particular skills with fewer migrants than under the skill “import” policy.

Suggested Citation

  • Stark, Oded & Byra, Lukasz, 2018. "How admitting migrants with any skills can help overcome a shortage of workers with particular skills," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 144-150.
    • Handle: RePEc:eee:reveco:v:57:y:2018:i:c:p:144-150
    DOI: 10.1016/j.iref.2018.02.019
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    References listed on IDEAS

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    1. Giovanni Peri & Kevin Y. Shih & Chad Sparber, 2014. "Foreign STEM Workers and Native Wages and Employment in U.S. Cities," NBER Working Papers 20093, National Bureau of Economic Research, Inc.
    2. Stark, Oded & Byra, Lukasz & Casarico, Alessandra & Uebelmesser, Silke, 2017. "A critical comparison of migration policies: Entry fee versus quota," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 91-107.
    3. C. Simon Fan & Oded Stark, 2011. "A Theory Of Migration As A Response To Occupational Stigma," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 549-571, May.
    4. John Bound & Gaurav Khanna & Nicolas Morales, 2017. "Understanding the Economic Impact of the H-1B Program on the U.S," NBER Working Papers 23153, National Bureau of Economic Research, Inc.
    5. John Bound & Gaurav Khanna & Nicolas Morales, 2017. "Understanding the Economic Impact of the H-1B Program on the United States," NBER Chapters, in: High-Skilled Migration to the United States and Its Economic Consequences, pages 109-175, National Bureau of Economic Research, Inc.
    6. Giovanni Peri & Kevin Shih & Chad Sparber, 2016. "STEM Workers, H-1B Visas, and Productivity in US Cities," World Scientific Book Chapters, in: The Economics of International Migration, chapter 9, pages 277-307, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Cuadros, Ana & Martín-Montaner, Joan & Paniagua, Jordi, 2019. "Migration and FDI: The role of job skills," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 318-332.

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    More about this item

    Keywords

    Skill heterogeneity; Production externalities; Market inefficiency; Shortage of particular skills; Social planner's choice; “Import” of skills; A migration admission fee; Skill acquisition subsidy;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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