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high-skilled labor

Global talent flows: Causes and consequences of high-skilled migration

Caglar Ozden's picture

Co-authors: Sari Kerr, William Kerr, and Chris Parsons

Highly skilled workers play a starring role in today’s knowledge economy. They make exceptional direct contributions, including breakthrough innovations. As teachers, policy makers, and entrepreneurs they guide the actions of others. They propel the knowledge frontier and spur economic growth. In this process the mobility of skilled workers, within and across national borders, becomes critical to enhancing productivity. Using newly available data, a recent paper by Kerr, Kerr, Özden, and Parsons reviews the landscape of global talent mobility and discusses the causes and consequences of highskilled migration.

Much attention has been paid to understanding the worldwide distribution of human capital and how global migration flows further tilt the deck against poor countries. The migration patterns we see today are the result of a complex tangle of firms and other employers pursuing scarce talent, governments trying to manage these flows through policy, and individuals seeking their best options given the constraints imposed on them. The central outcome, however, is clear: the flows of high-skilled migrants are very concentrated, both within and across national borders.

Non-tradable sector wages track high-skilled tradable sector wages

Oscar Calvo-González's picture

Recent data on hourly wages in Latin America and the Caribbean (LAC) reveal that Latin Americans working in the non-tradable sector (as in construction, transportation, hotels, or education) earn much more than workers in low-skill tradable sectors such as agriculture or low-tech manufacturing, and closer to high-skill workers in the tradable sector such as high-tech manufacturing or finance. Despite slight variations across countries, in 11 out of 17 countries studied, the difference between wages in low-skill tradable and non-tradable sectors has grown over the last ten years.[1] In most of these countries, hourly wages display a distinct trend: positive growth for high-skill tradable and non-tradable wages, and stagnating, or even declining for low-skill tradable wages.

Graph showing trends in non-tradable wages in Latin America

Source: World Bank's LAC Equity Lab