Highly-skilled workers play a central role in today’s knowledge economy. The global war for talents is intensifying. With the increasing anti-immigrant sentiments in recent years, not only does Europe gradually lose attractiveness to highly-skilled migrants, but also its ability to retain those who have already migrated. Most of the highly-skilled migrants are temporary (< 5 years) rather than permanent. Governments in Europe struggle to maintain the country’s economic competitiveness. With many policy options available, what is the most suitable and efficient policy to maximize the economic contribution of highly-skilled migrants?

This PhD project aims to fill in the research gap on the temporary feature of highly-skilled migrants and provide solid empirical evidences for migration policy making with rich administrative microdata from Statistics Netherlands, Turkish Statistical institute, and National Bureau of Statistics of China. Our primary research question is to investigate whether former employer(s) in the host country can still reap benefit from knowledge diffusion of highly-skilled migrants after they leave the host country. We are going to look into a wide range of firm-level outcomes on production upgrading domestically and on trade/ offshoring internationally. We will also be interested in how the home country and the third country of destination possibly benefit from the circulation of the highly-skilled migrants.

Job description
Highly-skilled workers play a central role in today’s knowledge economy. Many countries put in substantial policy efforts to attract them. Highly-skilled migrants are mobile and very concentrated in space (Kerr et al 2016). Europe, apparently is not the best player on the field. With the increasing anti-immigrant sentiments in recent years, not only does Europe gradually lose attractiveness to highly-skilled migrants, but also its ability to retain those who have already migrated. In the Netherlands, one of the most developed and popular destinations in Europe, about 80% of migrants under the highly skilled migrants scheme are temporary migrants rather than permanent. They stayed less than 5 years even though the tax exemption can be valid up to 8 years and even though they are immediately eligible to apply for a permanent residence after 5 years upon arrival.

The global war for talents is intensifying. Governments in Europe struggle to maintain the country’s economic competitiveness. With many policy options available, what is the most suitable and efficient policy to maximize the economic contribution of highly-skilled migrants? First, policies such as a favorable tax reduction and providing better international infrastructure aim to increase the country’s overall attractiveness to highly-skilled migrants worldwide so that they are more willing to come. Second, citizenship policies such as lowering requirements of local language proficiency in becoming permanent migrants or naturalized aim to provide a smooth path for highly-skilled migrants already in the host country to permanent residents. These two sets of policy actions are frequently implemented and are quite well-understood in literature (see, e.g. Kleven et al 2014; Gathmann and Garbers 2023).

Third, a new direction of policies should consider how to best make the full potential of temporary highly-skilled migrants. The temporary feature of migration itself, is fundamentally different from permanent migration in economic behaviors. Therefore, the omission of the difference might imply incorrect policy advises (Dustmann and Görlach 2016). Developing more short-stay or temporary working programs for highly-skilled migrants and strengthening post-emigration networks might efficiently boost brain circulation. For example, if several software engineers from India come to work in the Netherlands for 3 months on a temporary working program and move to Silicon Valley in the US later on, it can be beneficial for the Dutch firm if it can maintain this high-quality relation and potentially could upgrade its products and the global strategy in the future. Despite these hypothesized advantages, the policy actions of facilitating brain circulation via temporary highly-skilled migrants is very little understood due to the constraints of data availability tracking migrants across national borders (Bossavie et al 2022).

This PhD project aims to fill in the research gap on the temporary feature of highly-skilled migrants and provide solid empirical evidences for migration policy making with rich administrative microdata from Statistics Netherlands, Turkish Statistical institute, and National Bureau of Statistics of China. The focus will be on the firms that have ever hired highly-skilled migrants and on the period of post-emigration out of the host country. The heterogeneity of emigrants who return to the home country and emigrants who migrate to a third country as destination will be distinguished.

Our primary research question is to investigate whether former employer(s) in the host country can still reap benefit from knowledge diffusion of highly-skilled migrants after they leave the host country. We will look into a wide range of firm-level outcomes on production upgrading domestically and on trade/ offshoring internationally. We will also be interested in how the home country and the third country of destination possibly benefit from the circulation of the highly-skilled migrants.

This PhD project relates to an emerging literature on the causal impact of policy change in temporary highly-skilled migrants visas on firm performances (Glennon 2023; Doran et al 2022; Chen et al 2021), and provide a new perspective of boosting brain circulation to the strand of literature on cross-border knowledge diffusion of migrants (Bahar et al 2022; Di Iasio and Migueliz 2022). The research outcomes are highly relevant to multiple stakeholders including migrants, firms and government.

Expected output
The expected output of this project will generate 3 working paper which has the potentials to be in general-interest economic/management journals such as Review of Economics and Statistics, Economic Journal, and Management Science. In the meantime, to ensure a wider audience through internet, a summary of the results will be appearing as policy briefs in websites such as voxeu.org, edited by Center for Economic Policy Research. We will use our social media accounts, as well as the School’s as an active outlet for the research results to get higher exposure.