DP4274 The Demand for High-Skilled Workers and Immigration Policy
Authors: Thomas Bauer (University of Bochum) and Astrid Kunze (Norwegian School of Economics and Business Administration)
February 2004
In the last few years, employers in developed economies have complained about a shortage of skilled workers, leading many countries to take initiatives to admit more skilled foreign workers. Countries with existing immigration policies, such as the US, Canada or Australia, increased their quotas for high skilled immigrants. Other countries, especially in Europe, introduced new immigration possibilities directed exclusively toward high skilled immigrants. Overall, these policy initiatives suggest an increasing competition of developed countries for high skilled immigrants.
CEPR Discussion Paper No. 4274 provides a descriptive analysis of the demand for high-skilled workers using a new firm dataset, the IZA International Employer Survey 2000. Covering four countries (Germany, France, the Netherlands, and the UK), the survey focuses on the five economic sectors - chemical, manufacturing, IT, research and development, and finance - that are most important for the employment of high skilled workers. Hence, the data is not representative on a country level but is arguably representative within sectors. In addition to country, sector and employment characteristics, the data provides a wealth of information on firm characteristics and why firms participate in global labour markets.
The results suggest that while workers from EU countries are mainly complements to domestic high-skilled workers, workers from non-EU countries are hired because of a shortage of high-skilled labour. The Paper, provides, furthermore a short description of recent German policy initiatives regarding the temporary immigration of high-skilled labour. In view of this Paper's descriptive results, these temporary immigration policies seem to satisfy only partly the demand of firms interested in recruiting foreign high-skilled workers. The authors argue that a more comprehensive immigration policy covering also the permanent immigration of high-skilled workers appears to be necessary.
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