This paper seeks to determine the macroeconomic impacts of migration of skilled medical personnel from a receiving country's perspective. The resource allocation issues are explored in theory, by developing an extension of the Rybczynski theorem in a low-dimension Heckscher - Ohlin framework, and empirically, by developing a static CGE model for the UK with an extended health sector component. Using simple diagrams, an expansion of the health sector by recruiting immigrant skilled workers in certain cases is shown to compare favorably to the long-term (short-term) alternative of using domestic (unskilled) workers. From a formal analysis, changes in nonhealth outputs are shown to depend on factor-bias and scale effects. The net effects generally are indeterminate. The main finding from the applied model is that importing foreign doctors and nurses into the UK yields higher overall welfare gains than a generic increase in the NHS budget. Welfare gains rise in case of wage protection.

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Review of International Economics
Erasmus School of Economics

Rutten, M. (2009). The economic impact of medical migration: A receiving country's perspective. Review of International Economics, 17(1), 156–171. doi:10.1111/j.1467-9396.2008.00798.x