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

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Dokumentart: Article
Date: 2018-10-16
Source: University of Tübingen Working Papers in Economics and Finance ; No. 111
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Fähigkeit , Fertigkeit
Other 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
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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.

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