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

Oded STARK, Chengze, Simon FAN

Research output: Journal PublicationsJournal Article (refereed)

6 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)277-287
Number of pages11
JournalReview of International Economics
Volume19
Issue number2
DOIs
Publication statusPublished - 1 May 2011

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