Migration to the EU : social and macroeconomic effects on sending countries

In June 2016, the European Commission issued a new EU Blue Card proposal. The new proposal is meant to make the EU more attractive for highly qualified workers from third countries. While aimed at strengthening the knowledge-based economy of the EU, the potential impacts of the new Blue Card proposal on less developed sending countries raise a number of questions. The present study attempts to shed light on potential challenges and opportunities by analysing the impacts of the new EU Blue Card proposal on the knowledge-based capital in sending countries - as one of the main drivers of the economic growth. Our results suggest that the EU Blue Card may reduce the knowledgebased capital, and hence growth and development prospects in less developed sending countries if not accompanied by appropriate policy measures. Examining a number of alternative policy measures, which could help turning the sending country challenges into opportunities, our results suggest that policies implemented on the demand side of the sending country labour market are more efficient than policies that address the supply side of the labour market, though they are less costly to implement.