Employment Policies and Productivity: The Impact of Migration and "Brain Drain" on Firm Performance in North Macedonia

This paper examines how high-skill emigration (“brain drain”) affects firm productivity in North Macedonia and whether employment policy intensity mitigates the adverse effect. The study frames brain drain as a firm-level constraint operating through skill gaps, higher turnover, and disrupted tacit knowledge transfer. Methods propose a panel-style empirical strategy linking firm performance indicators to regional brain-drain measures and policy intensity (training/reskilling and job-matching instruments). A moderated regression specification is used to estimate the migration effect and the interaction with policy intensity, while recommended robustness checks include firm fixed effects, sector controls, and instrumental-variable strategies for migration endogeneity. Using a coherent illustrative dataset to demonstrate the analytical pipeline, results show a negative association between brain-drain intensity and labor productivity and a partial offset where policy intensity is higher. The conclusions emphasize that employment policies designed around scarce skills and retention mechanisms can reduce productivity losses in skill-intensive sectors. The paper provides actionable implications for firms’ human-capital strategies and for policy makers focusing on skill formation, matching efficiency, and incentives to retain talent.