Editor’s summary
A long-standing challenge facing low-income countries is that many of their most highly educated citizens emigrate in search of greater opportunities elsewhere. Although this “brain drain” effect can directly decrease the country’s stock of human capital, Batista et al. reviewed evidence supporting indirect “brain gain” benefits as well. Highlighting research that uses empirical methods to estimate causal effects of emigration, the authors examined how migration opportunities can prove beneficial for origin countries. Many who invest in education motivated by migration may ultimately not emigrate, increasing the domestic stock of human capital. Emigration can lead to domestic benefits through remittances, knowledge transfers, foreign investment and trade, return migration, and other channels. Further research can help in our understanding of the conditions and policy approaches that might best support such origin country benefits from skilled emigration. —Brad Wible
Structured Abstract
BACKGROUND
Emigration rates are in the range of 10 to 50% for highly skilled individuals such as top academics, inventors, scientists, engineers, and medical professionals from many lower-income and smaller countries. There have long been concerns that this “brain drain” harms origin economies. However, high-skilled migration can also enhance human capital at home through “brain gain” effects on incentives to invest in education, remittances, and return migration. Additionally, it can have other beneficial impacts on well-being in the origin country through trade and business development, innovation, and transmitting knowledge and positive norms from the destination.
ADVANCES
Much of the debate around brain drain and gain has relied on theoretical arguments, anecdotes, and noncausal empirical associations. Recent research has used modern experimental and nonexperimental methods to establish causal evidence on these different channels.
We now have empirical validation of the theoretical argument that new high-skilled migration opportunities can increase, rather than decrease, the overall stock of educated workers in a country. Exogenous changes in US immigration policies resulted in more Filipinos training as nurses and more Indians acquiring computer science skills than the people emigrating, raising the total number with these skills at home (see summary figure). Human capital at the origin also increases through remittances funding education and from migrants returning with education and work experience acquired abroad. Whether the net effect is a brain drain or gain will depend on fundamental factors such as how quickly universities and training institutes can adjust to produce the skilled workers demanded abroad given the regulatory environment for higher education, or the conditions governing investments at home.
Other impacts on home economies vary with the time frame, type of skill migrating, and country context. There can be short-term negative consequences on firms and scientific innovation in origin countries when skilled workers depart, but over time these emigrants build trade and FDI networks and act as conduits for knowledge transfer. This can spur the creation of new industries, as has occurred in the IT sector in several countries. Migrants also tend to transfer political attitudes and social norms of their destination countries, which can boost support for democracy, improve population health, and enhance female decision-making power at home when migrants go to more liberal and democratic destinations.
The largest welfare impacts are on the high-skilled emigrants themselves, who often more than double their incomes by migrating. Migration also produces much broader positive impacts on origin communities. Benefits accrue not only to other household members left behind by the migrant, but also to entire regions through the investment, trade, entrepreneurship, and innovation channels described above. Despite fears of medical brain drain, there is an absence of causal evidence for negative impacts, and population health at home can also improve with emigration as a result of improved norms, remittances, knowledge transfers, and return migration of skilled health professionals.
OUTLOOK
Rising education levels worldwide, international competition for talent, and a preference for high-skilled migrants in many destination-country migration policies are all likely to ensure that the flow of high-skilled migrants from poor to rich countries will continue to grow. Recent literature should provide some reassurance to those concerned about “brain drain” as it demonstrates many potential ways origin countries gain from the outflow.
However, the evidence base remains limited, and there are many opportunities for new causal research. Most research looks at the impact of all types of skilled migration combined, or pools together educated and less-educated migrants, whereas net impacts may vary depending on the type of skill departing. Much of the literature focuses on impacts in a few large middle-income countries such as India, the Philippines, and Mexico, but outcomes may differ in more fragile and poorer countries that have fewer opportunities for skill acquisition and productive home investments. Despite these differences, for small, poor origin countries, the existing body of research can help clarify policies that may enable these countries to experience more of the benefits from skilled migration rather than the costs. The biggest research gaps, however, lie in understanding effective policy responses in sending regions. Comprehensive policy analysis requires a consideration of the full range of direct and indirect “general equilibrium effects” of emigration on all relevant labor markets, and any external benefits accruing to population health and well-being through new innovations and business creation.
“Brain drain” of Filipino nurses leading to brain gain.
The US expanded the number of visas available for foreign nurses between 2000 and 2006 and the number of nursing graduates in the Philippines rose substantially in response. Bar (A) shows the outflow of Filipino nurses to the US between 2000 and 2006. Bar (B) shows the number of newly licensed Filipino nurses between 2000 and 2006. Bar (A) + (B) show the net gain (“brain gain”) of nurses in the Philippines during this period.
Abstract
How does emigration of highly educated citizens of low-income countries to high-income countries affect the economies of the origin countries? The direct effect is “brain drain”—a decrease in the country’s human capital stock. However, there may also be indirect “brain gain” effects. This review summarizes evidence that uses causal inference methods to reveal mechanisms that may lead to brain drain, gain, or circulation. Collectively, the weight of the evidence suggests that migration opportunities often increase human capital stock in origin countries and produce downstream beneficial effects through remittances; foreign direct investment and trade linkages; transfers of knowledge, technology and norms; and return migration. We discuss conditions under which benefits from skilled migration may outweigh costs and also describe potential research paths to inform policy.
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