South-Western College Publishing - Economics  
Skilled Laborers Discover that Migration is a Two-Way Street
Topic Labor Markets
Key Words skills, staffing, wages, shortage, benefits
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Reference ID: A167766060

News Story Much of the focus of the immigration debate has centered on poor workers moving to rich countries. But there is a growing class of rich, skilled workers who migrate in search of income and/or benefits.

The World Bank discovered that from 1990 to 2000, the number of college-educated migrants in approximately 20 developed countries increased by 69%, while the number of less-educated migrants rose only 30%. The big distinction, though, is on the entrance: governments try to reduce the number of poorer, less-educated migrants to their country, but welcome the more educated ones with open arms, and lots of benefits.

The American University of Sharjah in Dubai is a recent addition to the global educational marketplace, and approximately half of its 300 faculty are from North America. They are drawn by the prospect of tax-free income, lots of amenities to make them feel close to home, free housing and utilities, and opportunities to travel to many other countries around the world.

Not everyone has a good experience from the process, as culture issues definitely come to the foreground under such circumstances. But the fact remains that migration is much easier when a person is educated.

And when migration is embraced with open arms, the youth of the world see a picture of diversity like never before. The United Arab Emirates requires a significant labor force from outside its borders. Students at its institutions see ethnic workforces from India or other countries in Southeast Asia, teachers from North America or Europe, and ski instructors from Russia.

Some countries then want its educated immigrants to stay. Countries like Canada and others in Europe have set up systems in which work visas can be gotten under the right circumstances. Other countries offer tax breaks for foreign workers. Several others encourage foreign students studying there to remain.

Discussion Questions:
1. Why do you think that these countries offer benefits such as free housing, tax-free income, etc, rather than simply offering higher salaries?
2. Why do you think the distinction between bringing in educated workers vs. uneducated workers exists? Why do countries try to bring in the former, and try to exclude the latter?
3. What impact do you think this migration process has on wages offered in the home country?
Multiple Choice/True False Questions:
1. Tax breaks or other encouragements to remain in a foreign country are designed to change the _________ of remaining in that country.
  1. Sunk cost
  2. External cost
  3. Fixed cost
  4. Opportunity cost
2. Skilled workers are offered higher wages because for people with those skills,
  1. Quantity supplied is less than quantity demanded
  2. Quantity demanded is greater than quantity supplied
  3. Quantity demanded is equal to quantity supplied
  4. No such workers exist.
3. The fact that a diverse work force is seen by the young population in a country, and can grow to see that as the norm is a _________ from the migration process.
  1. Sunk cost
  2. External cost
  3. External benefit
  4. Opportunity cost
Source DeParle, Jason, “Rising Breed of Migrant Worker: Skilled, Salaried, and Welcome,” The New York Times, August 20, 2007.
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