Highly Skilled Migration and the Brain Drain Issue.

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From Carim

An important issue arising from the debate on highly-skilled migration is brain drain and its potential impact. Hence, if source countries suffer a significant loss of their highly qualified workforce and if this produces negative economic outcomes, then one usually speaks of skilled migration as a “brain drain”. It may be useful to recall that the term was coined in post-war Britain to describe the emigration of British scientists to the US. One can distinguish three views:

Conventional view: brain drain is detrimental to source countries. According to this view, the transfer of skills from less to more developed countries is detrimental to source countries because skills lost through emigration are:

Scarce in developing countries;

Needed for their economic development;

Produced at their expense, as soon as skilled emigrants have been educated in their country of origin.

It has a direct cost as it amounts to reverse aid to development, and an opportunity cost as it means the loss of emigrants’ contribution to the national economy. In a nutshell, brain drain is one facet of unequal global exchange.

Iconoclastic view: taxing the brain drain. Recognising that the magnitude, and even the existence, of direct and opportunity costs for skilled migration is uncertain, Bhagwati highlighted that one of the problems that the emigration of the highly-skilled certainly creates is a loss in taxes. “Taxing the brain drain”, i.e. extending the tax system to include emigrants’ incomes, would provide developing countries with additional revenue, with a goal of maximizing the well-being of all citizens (including emigrants). The rationale behind this is equity: as highly-skilled migrants usually retain their citizenship (and right to vote) taxing their income is a way to avoid “representation without taxation”. An (often desirable) side-effect would be that fewer highly-skilled workers would leave to avoid being taxed abroad.

Balanced view. Highly-skilled migration from developing countries may bring positive or negative outcomes, according to circumstances and policies.

It may increase financial gains through rising remittances, as soon as highly-skilled migrants’ savings in developed countries are greater than the wages that they would have received, had they stayed in their home country. For this to happen, however, their propensity to remit must be sufficient.

Highly-skilled migration may also result in gains in human capital through a “brain chain” mechanism: either thanks to technology transfers made by emigrants, or thanks to the promotion of qualifying migration, i.e. temporary migration schemes that favour the return of migrants after their acquisition of additional qualifications.

A mechanism of “brain gain” may also occur. While the emigration of skills has a direct, short-term effect of resulting in fewer skilled-workers, it may raise the expected return on education and have an indirect, mid-term effect in producing more educated people than opportunities for employment abroad, thereby elevating the level of education at home.

III. General key questions

In order to assess the costs and benefits of highly-skilled migration and more specifically the existence of a brain drain, two key questions must be asked:

What is the level of skills transferred through migration? A Moroccan engineer working in Canada will not represent the same skill package being transferred from Morocco to Canada if the engineer’s tertiary education and diploma was gained after departure, once established in Canada. ‘Where did education take place?’ and ‘Were skills mainly acquired in the source or in the host country?’ are then important questions in evaluating the existence and magnitude of any brain drain. They are all the more relevant since the globalisation of university education has recently gained tremendous momentum.

Are skills lost through emigration a scarce resource in the country of origin? Higher education varies enormously in quantity and quality throughout the developing world. So does the employment of highly-skilled workers. After decades of considerable efforts and investment in education by families and governments, a number of countries now suffer “brain waste”: i.e. high unemployment among young people with university education, and often with a diploma, as a result of mismatches between education and employment. Therefore, the quantity of education exported through emigration does not accurately reflect the “brain drain”

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