HRSDC-IC-SSHRC Skills Research Initiative

Working Paper Series

Labour Mobility and the Global Competition for Skills: Dilemmas and Options
by Richard G. Harris.

• Request this document (Format: PDF, 120 KB)

Abstract

The paper provides an overview of the impact of increased labour mobility in high skill occupations on welfare, productivity growth, income distribution and on the constraints facing small country economic policy makers. Two broad analytical frameworks are identified: the factor migration approach to international human capital movements and the labour market integration approach derived from the literature on economic unions. Within both approaches the welfare impacts of increased labour mobility are generally small within the neoclassical models of trade and growth unless some additional factors are introduced. Three channels which affect productivity dynamics are discussed: national human capital externalities, global knowledge spillovers and economies of specialization feasible in more closely integrated labour markets. Increased labour mobility raises a number of policy dilemmas. Small countries may be potential losers in a non-cooperative global skills competition with race to the bottom type outcomes. Alternatively labour market integration initiatives within free trade areas may carry large benefits to small countries. Initiatives to improve labour mobility for skilled workers within NAFTA could prove to be quite important for long run Canadian growth.