Skill-Biased Technological Change, Unemployment, and Brain Drain

Fadinger, Harald; Mayr, Karin

doi:10.1111/jeea.12049

Cited by 18 publications

(14 citation statements)

References 48 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Since migrant workers increase the TFP of firms in a region or a country (Beerli et al, 2018;Mitaritonna et al, 2017), we reasonably expect that foreign managers have no lesser impact given their crucial role in any firm's organization. In a general equilibrium model, Fadinger and Mayr (2014) show how a relative increase in the endowment of skilled migrants reduces the relative unemployment rate and the relative emigration rate (brain drain) of skilled workers in a country, with a magnitude depending on the elasticity of substitution between skilled and unskilled workers as well as on the well functioning of the matching on labor markets. In the end, the international geography of skills can have aggregate and distributional impacts with significant consequences from an international perspective (Burzynski et al, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Talents from Abroad. Foreign Managers and Productivity in the United Kingdom.

2019

View full text Add to dashboard Cite

In this paper, we test the contribution of foreign management on firms' competitiveness. We use a novel dataset on the careers of 165,084 managers employed by 13,106 companies in the United Kingdom in the period 2009-2017. We find that a domestic manufacturing firm becomes on average between 9% and 12% more productive after hiring at least one foreign manager. Interestingly, productivity gains by domestic firms after recruiting foreign managers are similar in magnitude to gains after foreign acquisitions as from previous literature. Eventually, we do not find significant gains by foreign-owned firms hiring foreign managers. Our identification strategy combines difference-indifference and matching techniques to challenge reverse causality. We proxy firms' competitiveness either by total factor productivity or by technical efficiency derived from stochastic frontier analyses. Eventually, we argue that limits to the circulation of talents, as for example in case of a Brexit event, may hamper the allocation of labor productive resources.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Talents from Abroad. Foreign Managers and Productivity in the United Kingdom.

2019

View full text Add to dashboard Cite

show abstract

“…In fact, Chang et al (2007) and Lingens (2007Lingens ( , 2003 are among the most relevant references on this topic. Fadinger and Mayr (2014) presents a detailed analysis regarding SBTC and unemployment, but does not consider the role of trade unions and its impact on technology bias and unemployment. Indeed, the authors propose a novel extension of the standard direct technological change model by introducing skill-specific frictional unemployment and skill-premium migration.…”

Section: Introductionmentioning

confidence: 99%

How Powerful Are Trade Unions? A Skill-Biased Technological Change Approach

2017

View full text Add to dashboard Cite

This paper proposes a new theoretical framework aimed at understanding the link between technological change, skill premium, and employment. We build an endogenous growth model of directed technological change with vertical research and development (R&D) in which low-skilled workers might be organized in a trade union. This union can act as a monopoly seller of labor and decide unilaterally the low-skilled wage, or as a managerial union that bargains wage and employment with the employers' federation, i.e., firms. Our results suggest that (i) the impacts of trade unions on technological-bias and on the level of (un)employment crucially depend on their type and preferences; and (ii) trade unions can actually increase low-skilled wages and employment if they have some bargaining power and are employment-oriented. Furthermore, our framework provides some highlights to explain the relationship between wage dispersion and the deunionization process that occurred in the United Kingdom and the United States during the 1980s.

show abstract

“…Thus the disparity in returns to skill is higher especially in the beginning of the economic development transition, creating stronger incentives for higher skill workers to migrate to developed economies when income at home is relatively low. Fadinger and Mayr (2014) show that source countries with higher skill ratios have lower rates of high skill emigration and suggest skill-biased technological change (SBTC) as the explanation for this relation. However, they do not trace the dynamic relationship between economic development in source countries and the emigration of differently skilled individuals.…”

Section: Of 18mentioning

confidence: 94%

Source Country Economic Development and Dynamics of the Skill Composition of Emigration

Idu

2019

Economies

View full text Add to dashboard Cite

This paper presents an endogenous growth model of migration and technological diffusion with transitional dynamics, which provide explanations for the empirical pattern of the mobility transition. A two-skill group extension of this model offers new hypotheses regarding the skill composition of emigration during the mobility transition. Skill-biased technological change (SBTC), which first occurs in the destination, raises the relative return to high skill migration and thus the high-to-low skill emigration ratio. As SBTC eventually diffuses to the source economy, it also raises the relative return to high skill investment there, and causes a decline in the high-to-low skill emigration ratio. Empirical evidence using bilateral migration data from 31 destinations and 195 origins is shown to support this hypothesis, with the average income of origins, at which the peak high-to-low skill emigration ratio is reached, is estimated at $2000 in 2011 US dollars PPP (adjusted for purchasing power parity). Furthermore, research and development intensity as a measure of SBTC in destinations is shown to be empirically, positively linked to the bilateral high-to-low skill emigration ratio.

show abstract

Skill-Biased Technological Change, Unemployment, and Brain Drain

Cited by 18 publications

References 48 publications

Talents from Abroad. Foreign Managers and Productivity in the United Kingdom.

Talents from Abroad. Foreign Managers and Productivity in the United Kingdom.

How Powerful Are Trade Unions? A Skill-Biased Technological Change Approach

Source Country Economic Development and Dynamics of the Skill Composition of Emigration

Contact Info

Product

Resources

About