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Sunday, 23 October 2011

Should the brain drain be encouraged?

Yes, according to Charles Kenny. Letting medical professionals and other skilled workers from the developing world emigrate is a good deal for everyone. I would agree with his assessment. The key here it seems is the "counter-factual". Without the brain drain we would still see high unemployment and inefficient job matches. The brain drain in many ways represents more efficient matching of workers abroad who sometimes earn twice as much as they earn in their countries. Provided remittances and investment are encouraged, and that is critical, it represents a superior outcome to the status quo. The key therefore is on how governments in the developing world tap into the brain drain benefits - it should be seen as a positive opportunity rather than a negative constraint! Kenny helpfully pulls some studies that highlight these benefits. We have previously discussed this here, here and here. The question of the diaspora is not currently on the radar of the new government, but it should be. We shall write an policy essay on this in due course.

Immigration may be deeply unpopular with electorates throughout the developed world, but that hasn't deterred immigrants themselves: The foreign-born share of the population of high-income countries doubled between 1985 and 2005, to nearly 9 percent. And the percentage who were college graduates increased fourfold between 1975 and 2000. That's great news for the rich countries that benefit from their skills, of course. But as it turns out, it is also great news for the poor countries the migrants leave behind.

It is hard to find a more confused discussion than that surrounding brain drain. Opposition to unskilled migration is usually based on perceived self-interest, the threat of stolen jobs -- a misguided fear, but at least a rational one. But certain well-meaning Westerners call for immigration restrictions on educated workers from the developing world for the opposite reason: If you let them leave, they'll abandon their home countries to poverty and deprivation. In 2008, the respected medical journal The Lancet carried an editorial on the medical brain drain of doctors and nurses from low- to high-income economies, complaining that "richer countries can no longer be allowed to exp[l]oit and plunder the future of resource-poor nations"; the same issue carried an op-ed calling for those who recruited African workers abroad to be sent to the International Criminal Court. (Never mind that the ability to leave the country of one's citizenship is considered a human right by the United Nations.) As a result of such thinking, Britain's National Health Service has a code of practice that bans recruitment from 150 developing countries, and there have been calls for something similar in the United States.

Certainly, most skilled migrants make more money abroad than they would at home. John Gibson at the University of Waikato and David McKenzie of the World Bank document salary increases ranging from $40,000 to $60,000 a year for skilled emigrants from developing countries across a range of professions. But the money these workers make abroad doesn't stay there: The average Africa-trained member of the American Medical Association sends home $6,000 a year in remittances, often for two decades or longer. Indeed, remittances from immigrants are an incredibly powerful force for development in any number of African countries -- more than the amount of foreign aid to Ivory Coast, triple that given to Togo, quadruple that to Nigeria, and nearly six times the aid to Mauritius. And the money is put to good use. One estimate from the U.N. Conference on Trade and Development suggests if you doubled remittances to a developing country, you could reduce poverty by nearly a third.

Perhaps more importantly, countries that swap people also swap goods, ideas, and investment. Doubling the number of people who have migrated between two countries raises trade between those countries by 10 percent. And if the number of skilled immigrants doubles in a recipient country, subsequent foreign direct investment to their countries of origin climbs 25 percent. William Kerr, an economist at Harvard Business School's Entrepreneurial Management Unit, even finds that migrants transfer back knowledge about increasing manufacturing efficiency -- so productivity increases in the home country as a result. Economists Hillel Rapoport at Bar-Ilan University and Frédéric Docquier at the Catholic University at Louvain report that about half of the Indian diaspora in Silicon Valley, which ran nearly one in 10 start-ups in the late 1990s, traveled back to India on business at least once a year. They were central to the creation of India's booming IT industry, which now employs around 2.5 million people. Another idea that appears to travel along with migration is democracy -- an International Monetary Fund study found that the more students a country sent for schooling in democratic countries, the more likely the home country was to become or remain a democracy.

But what about high-skilled migrants starving their home economies of vital human capital needed for development? Actually, Rapoport and Docquier conclude that the more high-skilled people leave low-income countries, the higher educational enrollments there climb. The opportunities presented by moving abroad spur people to stay in school and learn more. Surveying the brightest students in Tonga and Papua New Guinea, Gibson and McKenzie find that nearly all of them contemplated migration, and it led them to take on additional classes.

Similarly, Michael Clemens at the Center for Global Development finds no evidence that medical brain drain from developing countries leads to shortages of medical staff back home, probably because the opportunity to migrate is one of the things that attracts people to medical school in the first place. For years, nurses have left the Philippines in huge numbers to work abroad, but the country still has more nurses per person than Britain.

And finally, of course, lots of migrants return with valuable skills and contacts -- including many of those now working in the Indian IT industry. Economists William Easterly of New York University and Ariell Reshef of the University of Virginia carried out an informal survey of the entrepreneurs behind African global export successes and suggested that one factor many had in common was experience living abroad -- usually in the country they subsequently exported to.

All of this suggests those well-meaning folk in rich countries keen to put a travel ban on anyone from a developing country with a degree might want to reconsider their position. But it also contains a lesson for American economic policy. The United States benefits immensely from its talent imports -- immigrants account for over 60 percent of Ph. D. software engineers and more than half of its medical scientists, suggest McKenzie and Gibson. The country should do all that it can to ensure that inflow continues. And it could also do considerably better when it comes to talent exports. The most recent data suggest the United States had less than a third the number of high-skilled emigrants that Britain had -- despite having a population five times larger -- and half the number of Germany. If having a large high-skilled emigrant base in other countries is a powerful source of trade and investment links, the United States ought to be finding ways to encourage more of its best and brightest to spend some time elsewhere.

But in fact, the United States is heading in the opposite direction, on both sides of the trading equation. International applications to U.S. graduate schools only last year returned to their levels in the 2002-2003 academic year after a post-9/11 slump, a function of the stagnant economy and toughened immigration procedures. And at the other end of the degree process, there is growing concern about a "reverse brain drain," as more foreign graduates from U.S. schools decide to return home rather than find jobs in America -- again, often on account of byzantine immigration rules. Meanwhile, the U.S. House Appropriations Committee has proposed deep cuts to State Department international exchange program budgets that support the Fulbright program, among others. This shortsightedness regarding a program that promotes the talent trade in both directions isn't just bad news for the development prospects in Africa or Asia; it's likely to convert into a further erosion of America's long-term productivity.

1 comment:

  1. I read this article when it was first published and I haven't warmed to it in the interim. Kenny makes several good points: the people who leave do sometimes come back and bring ideas with them. His example was of India, which is so different from Zambia that I am sceptical about its relevancy to us(he, like so many, falls into the 'third is all the same' trap). Nevertheless, some new skills and ideas will come back to Zambia, but they will come back if we train our people overseas and they come back. Then we combine foreign skills and have time to graft them onto local conditions. Not all innovation is appropriate for Zambia, I am sure we don't need the most modern heaters used in Alaska (an extreme example admittedly). The argument that really irriatated was the argument that the remittances pay for education and home and the hope of getting out of the country pushes children to do better at school. Nothing wrong with the drive to excel. The problem is that they want to leave. The extra money sent home goes towards subsidizing emmigration. Which can be beneficial as a trickle but not a haemorrhage. We need the doctors to be HERE to treat people, not in LA. We need teachers HERE to teach, not in Jo'burg. If we export too many, which we are doing, it becomes counterproductive. There are no countries which have developed by exporting expertise. Russia imported experts in the 1920s and 30s, America imported European experts, China imported and sent students abroad. The evidence points towards bringing the specialists into the country and training your people overseas, that way we get the cross-pollination Kenny salivates over without loosing the expertise we so desperately need. Also, I have a suspicion he is justifying stealing our experts, just like people justified destroying our industry, though I wouldn't go so far as to say that he is conscious of doing so or part of a giant Western plot. But he is self interested. Let him live in a village that has produced two doctors who both left and say: its ok, we don't need doctors.

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