Short-Term Skilled Labour Movements and Economic Growth Massimiliano Tani* ABSTRACT Economic models typically study the long-term effects of migration, and hence emphasise their impact on a country’s endowment of skills using net migration rates. This approach however does not take into account the contribution of short-term movements of skilled labour on a country’s stock of knowledge and ability to innovate. This paper develops a theoreti- cal approach to extend the analysis to gross migration flows, which cap- tures the volume of interactions and the potential for knowledge exchanges between a country’s skilled labour and workers living elsewhere. One implication of the approach developed is that higher growth can be achieved through higher international labour mobility, even if there is no net migration. Countries that find it difficult or impossible to attract skilled labour on a permanent basis may therefore enjoy the growth effect brought by skilled temporary migrants. INTRODUCTION The international movement of skilled workers is of interest to research- ers and policymakers because, amongst other reasons, skilled labour is viewed as contributing positively to a country’s economic prosperity. Skilled workers are instrumental in generating new knowledge and ideas (e.g. Lucas, 1988; Romer, 1986, 1990; Wolff Edward, 2000), which are used to innovate the production processes, raise productivity, and increase the range of products available for consumption. In addition, skilled labour is instrumental in absorbing new knowledge and ⁄ or more efficient technology that is continuously developed around the world, and apply it to domestic productions and processes (e.g. Dosi et al., * Department of Economics, Macquarie University, Sydney, Australia. Ó 2008 The Author Published by Blackwell Publishing Ltd., Journal Compilation Ó 2008 IOM 9600 Garsington Road, Oxford OX4 2DQ, UK, International Migration Vol. 46 (3) 2008 and 350 Main Street, Malden, MA 02148, USA. ISSN 0020-7985