Labor Shortages and Immigration Policy

Martin Ruhs and Lucie Cerna (both from COMPAS) give short talks on immigration policy, labor shortages and highly skilled migrant workers.

The subject of labor shortage in the engineering sector has been receiving an increasing attention in Brazil in the last decade. As we argue here, easing immigration rules to attract foreign engineers might be important to alleviate some local bottlenecks. However, it falls far short of what is needed to properly deal with this issue on a national scale.

If Brazilian authorities are considering taking concrete initiatives to deal with an eventual shortage of engineers in the country, then they should be aware of the following points before choosing any particular policy:

1.      There is a clear labor market matching problem: only three out of ten people with engineering degree actually work in a typical engineering occupation;

2.      Academic drop-out rates are remarkably high among engineering students (51% for women and 59% for men). Besides, addressing this issue is the only way to ensure short-term results;

3.      Possibly, the problem lies rather in education quality than in the quantity of students that the Brazilian education system is able to 'produce';

4.      Any rapid expansion in student intakes could compromise even further potential quality problems and yet, it would only yield results after six or seven years;

5.      Easing immigration rules to attract foreign engineers might play an important role to alleviate some local bottlenecks. However, it falls far short of what is needed to properly deal with this issue nationally;

6.      Finally, we draw attention that the claimed shortage of engineers in the country might not be a matter of purely quantitative supply, rather the spatial concentration of engineering schools and labor force play a rather important role in this debate.