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Approximately 3 percent of the world’s population were immigrants in 2000 (International Organization for Migration [IOM] 2005). Within this group was a significant proportion of highly skilled and educated individuals who left their country of birth and settled elsewhere. This process is referred to as the brain drain because the sending countries in many instances lose a significant number of their most highly skilled people.
The economists’ approaches to discussing the brain drain were laid out in the early 1970s in a series of articles coauthored by Jagdish Bhagwati (1973, 1974, 1975, 1976). Although he was not the first economist to address the brain drain (see for example Grubel and Scott 1966, Johnson 1967, and Berry and Soligo 1969), Bhagwati and his coauthors were the first to address it systematically at a theoretical, empirical, and policy level. And many of the issues raised in these articles have become staples of the debate surrounding the phenomenon of the brain drain.
Although worldwide estimates of the proportion of immigrants who contribute to brain drain are not available, reliable estimates of immigrants and education status in Organization for Economic Cooperation and Development (OECD) countries are available. While highly skilled immigrants do immigrate to other countries, these OECD countries represent a significant destination. These estimates report that approximately 35 percent of immigrants over twenty-five years of age to OECD countries had a tertiary education, while only 11 percent of the worldwide labor force had the equivalent education (Docquier and Marfouk 2006). This means that on average those who emigrated were more highly educated than the population they left. In most instances the sending countries tend to be developing countries, which have lower rates of highly skilled workers in the population, while the receiving countries are developed countries. This occurs because most of this type of emigration is driven by the wage and opportunity differentials between countries and the preference given to the immigration of skilled labor by developed countries.
The magnitude of this phenomenon increased during the 1990s, and all evidence suggests a continuation of this trend (Docquier and Marfouk 2006). This is cause for worry for policymakers in developing countries, as they lose significant parts of their most educated individuals. For example, while individuals with tertiary degrees make up only 3 percent of the sub-Saharan African population, 43 percent of the emigrants have this level of education. Other regions face a similar problem. According to the World Bank in 2005, the numbers for tertiary educated individuals and emigrants with tertiary degrees are 6 and 47 percent respectively for Asia and 9 and 39 percent for the island nations of the Caribbean. These are not only significant proportions of the emigrants but can also be very large proportions of the stock of educated individuals within the country. For example, most Caribbean nations lose between 61 and 89 percent of their tertiary educated individuals to emigration, while numerous African countries lose over 30 percent (Docquier and Marfouk 2006).
While there are numerous concerns for sending countries, and often these may differ by country, three main concerns have been identified. The first is that these countries lose individuals who are important in the delivery of crucial public services such as health and education. Compounding this loss is that in these areas the sending countries do not have sufficient personnel. The second concern is that the individuals lost are among those most capable of contributing to the dialogue for both progressive political and socioeconomic change in the country. The third concern is that in most instances the significant cost of training these individuals has been primarily borne by the public sector and is now not recoverable in taxes these individuals would have paid and services they would have provided to the community (IOM 2005; Ozden and Schiff 2006). In contrast, receiving nations gain by filling in gaps in skilled personnel at a lower cost than they would have otherwise, and gaining in the different knowledge and insights that the immigrants bring. For example it has been estimated that a reduction in visas for graduate students and skilled immigrants to the United States would result in a reduction in both patent and grant applications (Chellaraj, Maskus, and Mattoo 2006).
The concern with brain drain has also resulted in the discussion of two related phenomena, brain gain and brain waste. Brain gain is the idea that because emigration raises the rate of return of education in the sending country, more investment might take place in education and could possibly lead to a net gain in educated personnel. This idea was formalized in the literature by Bhagwati and Hamada (1974). The most recent and comprehensive study, however, finds that the gains are small and do not replace the loss due to brain drain (Ozden 2006). Brain waste is a concern, raising the question of whether the receiving countries are efficiently using the skilled emigrants they receive. From the data available it appears that a large number of skilled immigrants to OECD countries often end up in jobs for which they are significantly overqualified. This can be the result of language or cultural barriers or lack of understanding of how to interpret qualifications from different educational institutions.
The brain drain has evaded easy policy prescription because successful policy that maintains an individual’s right to emigrate and recognizes the society’s loss from this emigration would require the collaboration of both receiving and sending nations. One of the more interesting and thought-provoking proposals addressing a number of the concerns raised by brain drain is a “brain tax” initially proposed by Bhagwati and Hamada (1974). The proposed tax was to be imposed on the émigrés and the funds collected administered by an international organization such as the United Nations Development Programme (UNDP) for development in less industrialized countries. The strength of this proposal was that it did not interfere with an individual’s right to migrate, but by taxing the individual it recovered some of the cost and positive externalities that the sending country had lost. It also marginally reduced the incentive to migrate by reducing the post-tax income of émigrés.
- Berry, R. A., and R. Soligo. 1969. Some Welfare Aspects of International Migration. Journal of Political Economy 77 (5): 778–794.
- Bhagwati, Jagdish N. 1976. The Brain Drain. International Social Science Journal 28 (4): 691–729.
- Bhagwati, Jagdish, and William Dellalfar. 1973. The Brain Drain and Income Taxation. World Development 1: (1–2): 94–101.
- Bhagwati, Jagdish, and Koichi Hamada. 1974. The Brain Drain, International Integration of Markets for Professionals and Unemployment: A theoretical Analysis. Journal of Development Economics 1 (1): 19–42.
- Bhagwati, Jagdish, and Carlos A. Rodriguez. 1975. WelfareTheoretical Analyses of the Brain Drain. Journal of Development Economics 2 (3): 195–221.
- Chellaraj, Gnanaraj, Keith E. Maskus, and Aaditya Mattoo. 2006. Skilled Immigrants, Higher Education and U.S. In International Migration, Remittances, and Brain Drain, ed. Caglar Ozden and Maurice Schiff, 245–326. Washington, DC: World Bank and Palgrave Macmillan.
- Docquier, Fredric, and Abdeslam Marfouk. 2006. International Migration by Education Attainment. In International Migration, Remittances, and Brain Drain, ed. Caglar Ozden and Maurice Schiff, 151–201. Washington, DC: World Bank and Palgrave Macmillan.
- Grubel, Herbert G., and Anthony D. Scott. 1966. The International Flow of Human Capital. American Economic Review May: 268–274.
- Hamada, Koichi, and Jagdish Bhagwati. 1975. Domestic Distortions, Imperfect Information and the Brain Drain. Journal of Development Economics 2 (3): 265–279.
- International Organization for Migration. 2005. World Migration 2005. Geneva, Switzerland: Author.
- Johnson, H. G. 1967. Some Economic Aspects of Brain Drain. Pakistan Development Review 3: 379–411.
- Ozden, Caglar. 2006. Educated Migrants: Is There Brain Waste? In International Migration, Remittances and Brain Drain, Caglar Ozden and Maurice Schiff, 227–244. Washington, DC: World Bank and Palgrave Macmillan.
- Ozden, Caglar, and Maurice Schiff. 2006. Overview. In International Migration, Remittances and Brain Drain, Caglar Ozden and Maurice Schiff, 1–18. Washington, DC: World Bank and Palgrave Macmillan.
- Schiff, Maurice. 2006. Brain Gain: Claims About Its Size and Impact on Welfare and Growth Are Greatly Exaggerated. In International Migration, Remittances and Brain Drain, ed. Caglar Ozden and Maurice Schiff, 201–226. Washington, DC: World Bank and Palgrave Macmillan.
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