Should Host Countries Regulate or Deregulate the Labour Immigration Policy when Accepting Study Migrants?

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This study investigates how host countries should manipulate the labour immigration policy when they accept study migrants and employ nonnatives simultaneously. In particular, this study clarifies whether host countries should regulate or deregulate the labour immigration policy, i.e. whether to open only the skilled job to non-natives or open skilled and unskilled jobs to increase domestic human capital. Many countries introduced the labour immigration policy and accepted skilled workers to import quality human capital while accepting study migrants to generate it domestically. In conducting these policies, they tend to deregulate the labour immigration policy and open unskilled as well as skilled jobs to non-natives. However, such a policy may lower the study migrants’ incentive to build quality human capital. This study finds that if unskilled jobs are less available to non-natives and the migration costs are high, it is likely that employed skilled migrants’ human capital is larger under the deregulated labour immigration policy. However, if unskilled jobs are much available to non-natives and the migration costs are small, we cannot determine a priori whether the employed skilled migrants’ human capital is larger under the deregulated immigration policy or the regulated one. These results suggest that the relaxed labour immigration policy is not necessarily compatible with the study migrants’ acceptance policy that attempts to generate skilled workers and that additional policies will be necessary to accomplish these objectives at once.

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