International Migration, Imperfect Information, and Brain Drain

46 Pages Posted: 20 Jul 2011

See all articles by Vianney Dequiedt

Vianney Dequiedt

French National Institute for Agricultural Research (INRA) - GAEL

Yves Zenou

Stockholm University; Monash University - Department of Economics; Research Institute of Industrial Economics (IUI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2011

Abstract

We consider a model of international migration where skills of workers are imperfectly observed by firms in the host country and where information asymmetries are more severe for immigrants than for natives. There are two stages. In the first one, workers in the South decide whether to move and pay the migration costs. These costs are assumed to be sunk. In the second stage, firms offer wages to the immigrant and native workers who are in the country. Because of imperfect information, firms statistically discriminate high-skilled migrants by paying them at their expected productivity. The decision of whether to migrate or not depends on the proportion of high-skilled workers among the migrants. The migration game exhibits strategic complementarities, which, because of standard coordination problems, lead to multiple equilibria. We characterize them and examine how international migration affects the income of individuals in sending and receiving countries, and of migrants themselves. We also analyze under which conditions there is positive or negative self-selection of migrants.

Keywords: asymmetric information, screening, self-selection of migrants, skill-biased migration

JEL Classification: D82, F22, J61, O12

Suggested Citation

Dequiedt, Vianney and Zenou, Yves and Zenou, Yves, International Migration, Imperfect Information, and Brain Drain (June 2011). CEPR Discussion Paper No. DP8459, Available at SSRN: https://ssrn.com/abstract=1889962

Vianney Dequiedt (Contact Author)

French National Institute for Agricultural Research (INRA) - GAEL ( email )

BP 47
38040 Grenoble
France

Yves Zenou

Monash University - Department of Economics ( email )

Australia

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Research Institute of Industrial Economics (IUI) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
3
Abstract Views
519
PlumX Metrics