The Effect of International Mobility on Wage and Employment of Highly Skilled Employees

Research on the effect of international labor mobility among highly skilled have traditionally been preoccupied with two issues. Firstly, we find a large body of literature concerned with socio-economic effects in terms of economic brain gain/brain drain for either the receiving or sending countries. Secondly, we find literature concerned with the pressure and/or strengthening of national labor force and its institutions. This paper offers a different perspective by measuring the effect of international mobility among highly skilled employees on their individual wage and employment. Thus, this paper is about the gains and or losses of international mobility for the individual highly skilled.

Drawing on an experimental methodology, the analysis employs a statistical propensity score matching method in order to measure the effect of international mobility among Danish highly skilled (i.e. masters and PhDs) after they return from abroad. The analysis is based on data on employees and firms from administrative registers in Statistics Denmark drawn for a selected group of Danish highly skilled. Results from two separate matchings show that very little is to be gained from international mobility. Recently graduated masters and PhD’s experience a negative effect on wage and no measurable effect on employment. For highly skilled employees with 2-5 years of experience within the labor market, international mobility seems to have no effect. However, when measuring uniquely the group of experienced highly skilled who was unemployed prior to leaving Denmark there is a small negative wage effect of having gone abroad.

The paper discusses these results in light of literature on the mobility of highly skilled and qualitative interview data from trade unions and employers’ organizations concerning the way international labor is recruited and employed within Danish companies.