World Bank – Brain Drain: Some myths and common concerns not founded

“High-skilled emigration is an emotive issue that in popular discourse is often referred to as brain drain, conjuring images of extremely negative impacts on developing countries. Recent discussions of brain gain, diaspora effects, and other advantages of migration have been used to argue against this, but much of the discussion has been absent of evidence.” write John Gibson and David McKenzie in Eight Questions about Brain Drain on worldbank.org. This is certainly the best review paper on the subject Job Market Monitor has covered.

“The new evidence should counteract some of the myths and assuage some of the most common concerns about brain drain. Brain drain rates are not skyrocketing. Africa is not the most affected region for brain drain; small island states are. Most skilled migrants are not doctors. But neither are they taxi drivers – they enjoy massive increases in living standards as a result of migrating. The rise in skilled migration does not appear to be crowding out migration opportunities for unskilled migrants: instead, skilled and unskilled migration have increased together. Skilled migrants are remitting back about as much as the fiscal cost of their absence. Existing preliminary estimates of the production externalities of brain drain are quite small.”

Their paper reviews “empirical research to answer eight key questions underlying much of the brain drain debate. JMM has looked at some of them, namely:

• What is brain drain?
• Is brain drain increasing?
• Is there a positive relationship between skilled and unskilled migration? 5)
• What makes brain drain more likely?
• Do high-skilled workers remit, invest, and share knowledge back home?
• What do we know about the fiscal and production externalities of brain drain?

Summary

(includes freely quoted and adapted excerpts )

• What is brain drain?

The ‘Brain Drain’ issue has been and continues to be an area of tremendous policy concern in many countries and takes place in the context of what is probably the largest distortion in the international global economic system: barriers on the mobility of labor

The term ‘brain drain’ was coined by the British Royal Society to refer to the exodus of scientists and technologists from the United Kingdom to the United States and Canada in the 1950s and 1960s . Now it is more typically used to refer to the emigration of a nation‘s most highly skilled individuals.

Typically these movements are from developing to developed countries, but it is also common to see newspaper stories concerned about brain drain from rural areas within the United States, and from selected high-income countries. Vice-versa, in many developed countries, immigrants constitute an important shares of the skilled labor force in many professions.

Skilled migration constitutes a disproportionately high share of total migration. In the median country, brain drain rate for tertiary-educated individuals is 7.3 times that of individuals with only primary education, and 3.5 times that of individuals with only secondary schooling. Moreover, not only are health professionals not the majority of high-skilled emigrants, but they appear to have lower emigration rates on average than other skilled professionals.

Not all educated migrants end up working in skilled occupations after they have migrated— a phenomenon which they call ―brain waste. The stereotype of foreign workers with Ph.D.s driving taxis is certainly the exception; only 2 out of 1,936 developing country migrants with Ph.D.s in the American Community Survey sample are taxi drivers: 79 percent of working migrants from developing countries with a bachelors‘ degree or more are working in occupations in the United States in which the majority of workers have post-secondary education, as are 90 percent of those with a masters degree or more, and 96 percent of those with a Ph.D. It is mainly skilled migrants from non-English speaking countries with poor quality education systems who struggle to find skilled work.

The economic literature on brain drain, and we would add, national debates, has long been concerned about the existence and extent of production and fiscal externalities.

• Is brain drain increasing?

In absolute levels, skilled migration is increasing. However, skill levels in migrant-sending countries are also rising, and for the world as a whole, skilled migration rose at about the same pace as overall education levels in the sending countries in recent decades, so that the brain drain rate remained quite stable for long periods of time and may have even fallen in the past decade.

• Is There a Positive Association Between Skilled and Unskilled Migration?

Levels of skilled and unskilled migration have a strong positive association—and thus that attempts to limit one form of migration are likely to affect the other. Both skilled and unskilled migrants are likely to determine their migration decisions in part on the basis of the institutional characteristics of their home country, and the presence of common links with potential destination countries.

• What Makes Brain Drain More Likely?

The rate of brain drain varies widely across countries. The strongest association is with country population size—that is, countries with less population have a higher proportion of brain drain. In addition, brain drain rates are higher in countries with fractionalization and political instability, and with low levels of human capital.

Emigration levels are almost universally higher among tertiary-educated individuals than among those with less education.

Rate of international brain drain from countries with small populations is similar to the rate of internal brain drain from areas of small population – both point to the desire for skilled workers to agglomerate in highly populated areas.

Emigration decisions are driven by broad career concerns such as the quality of opportunities to conduct research, to work with leaders in the profession, and to learn from the best, as well as lifestyle and family reasons, than by how much more people could earn abroad.

High-skilled want to be in places in which they can live well, without fear of violence or instability, and in which they have sufficient opportunities to advance their careers and work with like-minded people.

• Do High-Skilled Workers Remit, Invest, and Share Knowledge Back Home?

First, for most sending countries, less than half of tertiary-educated migrants send remittances. Second, there is a strong negative correlation between income levels and the likelihood that skilled migrants remit.

Both the incidence and the amount remitted appear to be even higher among the most highly-skilled migrants from countries with high levels of brain drain. High-skilled migrants remit, particularly back to lower-income countries, and the level of these remittances can be sizeable relative to per capita income in their home countries.

Less empirical evidence is available about the extent to which high-skilled emigrants invest or engage in knowledge flow or return investment, especially for the types of countries for which brain drain rates are highest.

• What Do We Know About The Fiscal And Production Externalities Of Brain Drain?

Developing countries pay thousands of dollars to train workers, only to see them migrate abroad. Estimates of how much the government pays vary widely, and depend on the split between public and private contributions to education in different countries.

The fiscal return from government providing such training depends on the incomes the high-skilled would earn if they had remained at home and the progressivity of the tax system. But, these fiscal costs are the same magnitude or less than the amount remitted by high-skilled emigrants – the difference being that remittances don‘t go to governments.

We know much less about the third possible area of return – that is, how brain drain affects the production and health externalities that may arise through education. The existing empirical evidence on health externalities from health worker migration is inconclusive.

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