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Institutions and the Location Decisions of Highly Skilled Migrants to Europe. WWWforEurope Working Paper No. 78
WWWforEurope: Welfare, Wealth and Work for Europe, January 2015, 42 pages
Commissioned by: European Commission
Supported by: Österreichische Forschungsförderungsgesellschaft mbH – Austrian Agency for International Cooperation in Education and Research – OeAD-GmbH
Study by: Project team WWWforEurope
Online since: 01.04.2015 0:00
This paper investigates the economic, labour market and institutional factors that make regions and countries attractive for highly skilled migrants vis-à-vis low-skill migrants. Based on micro-data for 11 EU countries, a discrete choice model estimated at the NUTS-2 level shows that location decisions are not only determined by factors related to earnings opportunities, distance, networks, common language and colonial relationships, but also by institutional factors such as migration policy, the income tax system, or labour market institutions. It also lends some support to the welfare magnet hypothesis: a higher unemployment replacement rate increases the attractiveness of a country. The empirical analysis however reveals only minor differences in the effects of institutions on location decisions by skill level, limiting the scope for policy makers to affect the skill composition of migration.
Research group:Structural Change and Regional Development
Language:English

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