Emigration can change the wage level and distribution in sending countries. These effects are larger than the effects of immigration in receiving countries. In the short term, emigration leads to labor shortages that increase the wages of non-emigrants with skills similar to those of emigrants (generally high-skilled workers), while lowering the wages of workers with different skills (often low-skilled workers). In the long term, however, the wage effects can be negative. Since low-skilled workers in sending countries generally lose from emigration, policy should focus on helping workers adapt, so they can fill the gaps left by high-skilled emigrants.
ELEVATOR PITCHHow migration affects labor markets in receiving countries is well understood, but less is known about how migration affects labor markets in sending countries, particularly the wages of workers who do not emigrate. Most studies find that emigration increases wages in the sending country but only for non-emigrants with substitutable skills similar to those of emigrants; nonemigrants with different (complementary) skills lose. These wage reactions are short-term effects, however. If a country loses many highly educated workers, the economy can become less productive altogether, leading to lower wages for everyone in the long term.