Eugenia Vella, Assistant Professor, Athens University of Economics and Business (School of Economics)
We study how international labor mobility interacts with fiscal policy and skills mismatch. We develop a small open economy model featuring heterogeneous households, endogenous migration decisions, search frictions, skills mismatch, and capital–skill complementarity (CSC) in production. Following a fiscal contraction, the economy experiences predominantly high-skilled emigration (“brain drain”) that amplifies the recession, while mitigating the rise in skills mismatch. We apply the framework to the case of the emigration wave during the Greek Depression. Quantitatively, we find that without the "brain drain", Greece’s mismatch rate would have been around 3 percentage points higher in 2016. These findings advance our understanding of the joint dynamics of labor mobility, fiscal policy, and skills mismatch, with important implications for the design of stabilization tools in open economies.
Meet our speaker and chair
Eugenia Vella is Assistant Professor at Athens University of Economics and Business (School of Economics) and Research Fellow at the Hellenic Foundation for European & Foreign Policy
She has held positions as Lecturer with tenure at the University of Sheffield (2015-20), Marie Skłodowska-Curie fellow at UAB (2018-20), Jean Monnet fellow (2014-15) & Max Weber fellow (2013-14) at the European University Institute. Her main fields are International Macro & Macro of Labor Markets.
Professor Vassilis Monastiriotis is Director of the LSE Centre for Research on Contemporary Greece and Cyprus - Hellenic Observatory, Professor in Political Economy and Eleftherios Venizelos Chair of Contemporary Greek Studies at the European Institute, LSE.
The Hellenic Observatory (@HO_LSE) is internationally recognised as a leading research centre on contemporary Greece and Cyprus. In 2024, it became the LSE Centre for Research on Contemporary Greece and Cyprus with a strategy to expand its research base within LSE and beyond. The Centre produces world-leading, non-partisan research, critically engaging with key issues and fostering debate among academics, policymakers, and the public. Its work spans academic research, knowledge exchange, and policy impact.
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