High-Skilled Labor Mobility in Europe Before and After the 2004 Enlargement

Abstract

The extent to which international high-skilled mobility channels are forming is a question of great importance in an increasingly global knowledge-based economy. One factor facilitating the growth of high-skilled labor markets is the standardization of certifiable degrees meriting international recognition. Within this context, we analyzed an extensive high-skilled mobility database comprising roughly 382,000 individuals from 5 broad profession groups (Medical, Education, Technical, Science & Engineering, and Business & Legal) over the period 1997-2014, using the 13-country expansion of the European Union (EU) to provide insight into labor market integration. We compare the periods before and after the 2004 enlargement, showing the emergence of a new East-West migration channel between the 13 mostly eastern EU entrants (E) and the rest of the western European countries (W). Indeed, we observe a net directional loss of human capital from E -> W, representing 29% of the total mobility after 2004. Nevertheless, the counter-migration from W -> E is 7% of the total mobility over the same period, signaling the emergence of brain circulation within the EU. Our analysis of the country-country mobility networks and the country-profession bipartite networks provides timely quantitative evidence for the convergent integration of the EU, and highlights the central role of the UK and Germany as high-skilled labor hubs.

We conclude with two data-driven models to explore the structural dynamics of the mobility networks. First, we operationalize a redistribution model to explore the potential ramifications of Brexit, showing the extent to which a 'hard' Brexit, i.e. complete disintegration from the EU, may benefit the overall homogeneity of the European mobility network. Second, we use a panel regression model to explain empirical high-skilled mobility rates in terms of various economic `push-pull' factors, the results of which show that government expenditure on education, per-capita wealth, geographic proximity, and labor force size are significant attractive features of destination countries.

Keywords: European Union, Brain drain, Brain circulation, mobility, high-skilled labor, labor markets, Brexit, Push-pull model

JEL Classification: J61, O52, O15, F22, F02