Where Have All the Flowers Gone? The Locational Choice of High-Skilled Immigrants Within the EU-15 Countries: Some Empirical Evidence on the Roy-Borjas Model

Abstract

Increasing immigration into western countries over the last 25 years has re-kindled scholarly and political debates over the economic consequences of such immigration for the receiving countries. So far, research has come up with diverging empirical results. There seems, however, to be agreement on one point: the economic impact of immigration is strongly dependent on who the immigrants turn out to be. Thus, the skill-based sorting of immigrants into various host countries can be expected to be highly relevant. Borjas has proposed a sorting model in which the skill composition of migration depends on the second moments of the income distribution in the sending and the receiving countries, provided that skills and income are correlated in both. Previous empirical tests of this model have failed to turn up consistent results. Using data from the OECD Migration Database on the educational levels of immigrants from EU-15 countries into other EU-15 countries the paper shows that the skill-based sorting of this immigration is consistent with the core prediction from the Roy-Borjas model. This result also obtains after control for network (or herd) effects, which are often marshaled as alternative explanations of the locational decisions of immigrants.

Helpful comments by George J. Borjas, Arye Hillman, Dennis Snower, and Oded Stark on earlier versions of this paper are gratefully acknowledged. Remaining errors are the sole responsibility of the author.