We study how foreign language proficiency affects brain drain by exploiting the exposure of parts of Albania to Italian television in the second half of the twentieth century. At that time, Albania was isolated from the rest of the world, with controlled internal migration and prohibited international migration. As the Italian TV transmitter accidentally reached Albania, Albanians’ exposure to the signal was as good as random conditional on geographical variables. We find that exposure to Italian TV led to a considerable increase in Italian proficiency rates. It also strongly increased the probability of emigration of highly skilled individuals, but did not affect other skill groups. We rule out other channels through which TV might affect migration and interpret our findings as the effect of foreign language proficiency on brain drain.

Presented at: The Junior Workshop on the Economics of Migration (Scheduled 14-15 June 2023 Paris), EUI Migration Working Group (2022),  IFO CEMIR Junior Economist Workshop  (2022),  Barcellona School of Economics (2022), Economics of Migration Junior Seminar (2022),  EUI Multidisciplinary Research Workshop (2022),  Applied Young Economist Webinar (2022), EUI Microeconometrics Working Group (2021). 

We show that the expected real wages commanded by some higher-education degrees decreased in absolute terms in France, in the past two decades, and that this drop is not due to adverse selection. To study the returns to degrees and experience, we assume the existence of a finite number of latent types and estimate a finite-mixture model. Each type has its own log-wage equation, experience-accumulation and education-choice equation. This allows us to decompose the treatment effects of education as an average of type-dependent effects. We then show that some unobserved types experienced a real-wage drop while others benefited from an increase, with the same degree. The observed “flattening” of returns to experience is also heterogeneous. In the case of Master degrees, the estimated distribution of latent types indicates that student selection improved with time, in spite of the fact that the number of graduates increased substantially. An excess supply of graduates might therefore be a likely explanation for the devaluation of Master’s degrees.

 Using danish administrative data, in this paper we study how individuals' skill set composition affects self-selection into entrepreneurship. We use detailed education registry data on high school grades to measure individual human capital, particularly high school grades in math and Danish language to measure analytical and communication skills. We find that the final GPA and the average grade in math and in Danish are negatively associated with the probability of becoming an entrepreneur. Instead, we observe a positive complementarity in math and Danish language grades in predicting individuals self selection into entrepreneurship. In particular, for students with high math grades the probability of starting a business is monotonically increasing in their oral grade in Danish, while it is not so for the rest of the population. We interpret these observational findings as evidence of the importance of a balanced skill set, particularly the complementarity between analytical and communication skills, for self-selection into entrepreneurship. We propose an identification strategy to casually estimate the effect of skill multidimensionality on the probability of becoming an entrepreneur. For the population of high performing math students we use information on parents' human capital and exploit within-school, across-cohort variation in students' exposure to peers whose father has a university degree in humanities. We find that the most treated individual (90th percentile) in our sample has 1.1 percentage points higher probability of becoming an entrepreneur compared to the least treated one (10th percentile). The effect is economically significant, being equal to 20\% of the overall share of entrepreneurs in the economy. Motivated by the evidence that students performing well in math run on average more profitable and bigger businesses, we highlight the importance of improving communication skills of individuals with high analytical abilities to incentivize the creation of high performing firms. 

The effect of brain drain on stayers (those who did not migrate) has been found in the literature to be both positive and negative. In this research, we exploit the as good as random exposure of part of Albania to Italian TV during the second half of the 20th century (Argan, Cheysson 2022) as an instrument for high human capital migration. Using multiple data sources (LSMS for Albania 2002, 2005, 2008, 2012), we can study the many effects of brain drain on the stayers over time. In particular, we can examine whether the welfare effects on stayers are negative in the short run but positive in the long run.

Nous étudions l’évolution des salaires des jeunes diplômés français entre 1992 et 2017,  en nous appuyant sur les enquêtes Génération du Céreq. La dévalorisation des diplômes est définie de manière simple comme la baisse des salaires réels moyens des diplômés d’une même catégorie, et nous observons qu’une telle dévalorisation des diplômes s’est bien produite, de l’ordre de 10%, pour les diplômes universitaires de master et pour les diplômes des écoles d’ingénieur, entre 1997 et 2015. Il n’y a en revanche pas de dévalorisation pour les diplômes de niveau inférieur au baccalauréat, et nous rapprochons ce dernier résultat de la hausse du Smic. En mettant les données sous la forme d’un panel nous estimons des équations de salaire en contrôlant pour l’expérience (potentielle et effective) et le niveau de diplôme des individus. Les estimations confirment les résultats et montrent que la dévalorisation observée est due en partie à une baisse des rendements de l’expérience. Avec ces méthodes, on ne sait pas ce qui est dû à des changements inobservables dans la sélection des diplômés, mais il semble vraisemblable que la dévalorisation est principalement le résultat de la hausse substantielle du nombre des diplômés du supérieur dans la période étudiée, et non un effet de la conjoncture ou de l’anti-sélection.