Education, Unemployment and Migration (Revised Version, 2009)

27 Pages Posted: 19 Sep 2009

See all articles by Wolfgang Eggert

Wolfgang Eggert

University of Freiburg - Institute of Public Finance; CESifo (Center for Economic Studies and Ifo Institute)

Tim Krieger

University of Freiburg - Department of Economics

Volker Meier

CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Ifo Institute for Economic Research at the University of Munich

Date Written: August 20, 2009

Abstract

This paper studies a two-region model in which unemployment, education decisions and interregional migration are endogenous. The poorer region exhibits both lower wages and higher unemployment rates, and migrants to the richer region are disproportionally skilled. The brain drain from the poor to the rich region is accompanied by stronger incentives to acquire skills even for immobile workers. Regional shocks tend to affect both regions in a symmetric fashion, and skilled-biased technological change reduces wages of the unskilled. Both education and migration decisions are distorted by a uniform unemployment compensation, which justifies a corrective subsidization.

Keywords: Brain drain, Brain gain, Education, Unemployment, Interregional migration, Externalities

JEL Classification: H23, I20, J61, J64, R10

Suggested Citation

Eggert, Wolfgang and Krieger, Tim and Meier, Volker, Education, Unemployment and Migration (Revised Version, 2009) (August 20, 2009). Available at SSRN: https://ssrn.com/abstract=1474694 or http://dx.doi.org/10.2139/ssrn.1474694

Wolfgang Eggert

University of Freiburg - Institute of Public Finance ( email )

D-79098 Freiburg
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Tim Krieger (Contact Author)

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

Volker Meier

CESifo (Center for Economic Studies and Ifo Institute for Economic Research) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Ifo Institute for Economic Research at the University of Munich ( email )

Poschingerstr. 5
Munich
Germany

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