Monday 4 January 2016

The Brain Gain: Why Smart People Should be Encouraged to Leave Developing Countries

Guest post by Denise Coenegracht

Skilled workers emigrating from developing countries are good for us, but bad for the developing countries At least, according to the received wisdom. When considering the facts, a different picture emerges. One with many economic upsides for the migrant's home country. Meet the brain gain.

A statement that is often made in the European debate about the current influx of refugees is that a significant portion is well educated. Many believe this ‘brain drain' will be problematic for the now war-torn countries when the time comes to rebuild them.

The unquestioned assumption here is that skilled workers leaving to work abroad is necessarily a bad thing for their country of origin. ‘Brain drain' has been part of mainstream vocabulary for years. It designates a phenomenon that, according to the man in the street and policymakers alike, has clear negative consequences for developing countries. When a skilled migrant leaves, the country that is left behind supposedly loses, since it has invested money in education for which it now gets nothing in return. Strong moral judgments often accompany this idea, of both the rich countries that supposedly exploit their ability to extract the human resources of poorer countries and of the migrants themselves, who are considered to be selfish and unpatriotic.       
A case in point is an article that recently appeared on the website of Foreign Policy. It is about educated Afghans leaving the country due to increased violence and a bleak economic outlook. John Ging, director of operations for the U.N. Office for the Coordination of Humanitarian Affairs, is quoted as saying: "The government is very concerned that the profile of most of these people is that they're the educated, which means it's a brain drain for Afghanistan and will undermine their economic potential."

This example illustrates how deeply-rooted beliefs about the brain drain are. From the fact that most of the people leaving Afghanistan are educated, Ging jumps right to the conclusion that their departure will be bad for the Afghan economy. And Foreign Policy, an influential and respectable publication, prints his argument without giving it a second thought.

Even US President Barack Obama has spoken out about the issue. In August, when addressing young African leaders of the Mandela Washington Fellowship, Obama stated that African leaders could stop the ‘brain drain’ they were facing by ensuring the basics of the rule of law, democracy, governance and peace.

On the face of it, it seems cause for optimism that the detrimental nature of the brain drain is something many can agree on. In the past it has formed a basis for policy coordination between Western and developing countries. One example is the moratorium on recruiting doctors from areas that have a shortage of them.

The only problem is that there is almost no evidence to support the idea that the emigration of educated people does harm to the country of origin and ample evidence to indicate the contrary. The benefits of skilled workers leaving in general greatly outweigh the costs. In other words, it is time to rename the brain drain. We should start calling it brain gain instead.   

I realise I am making a bold statement here. Where is the evidence to support it? Well, the arguments for brain gain can be found in numerous scientific research papers that have been published over the last years. For some reason their content has not permeated the public debate yet. It is high time that it does.

The first important fact that is usually overlooked is that skilled migration promotes trade. A 2014 study by the World Bank shows that the presence of migrants from Africa in a country increases exports from their home country to their country of residence. Institutions in Africa are often weak, causing the business climate to be rather insecure. The connections that migrants have in a country can compensate for this institutional weakness.  This reduces the risk of doing business.

The study also reveals that the positive effect of emigrants on exports is highest for so-called ‘differentiated products'. Differentiated products are advanced products that can easily be distinguished from competitors', unlike more basic products such as raw materials or unprocessed food. Cars, wines and television programmes are examples of differentiated products.

This influence on the export of differentiated products in particular indicates that migrants also contribute to the increase in trade by providing information. Migrants can provide first-hand knowledge about speciality products from their home country - e.g. Bollywood films - and tell their new compatriots about them. If it were not for the migrants, the developed country might never have heard of these products.

To state the point in a more quantitative way: according to the World Bank every new African migrant is responsible for an average increase of 2,100 dollars per year in exports from their country of origin. 

Trade promotion is not the only economic upside of the emigration of educated workers. A benefit that seems quite obvious, yet is often overlooked, is that labour migrants send remittances home. Most people that migrate are not just looking for a better future for themselves, but also for the loved ones they leave behind. The money that comes in this way can be a boost for the economy of a developing country.

A common misconception is that only unskilled workers send money home. But from what researchers have gathered so far, it seems that skilled workers remit just as often as unskilled workers. Moreover, since skilled workers earn more money, they generally send larger sums.

Those that defend the concept of brain drain often claim that the home country loses money as a result of emigration. The effect of remittances means that this line of reasoning does not hold. Renowned development economist Michael Clemens published an article in 2011 on African doctors working in the United States and Canada. One of his findings was that the amount of money these doctors send home is usually many times more than their medical training has cost. In these cases the doctors' countries of origin definitely see some ‘return on their investment'.

The third economic benefit for a country that sees many of its well educated inhabitants leave is probably the most unexpected one. Namely, the emigration of skilled workers from developing countries actually results in a higher number of skilled workers living in these countries than would have been the case otherwise. The supply of a country's human capital, unlike its natural resources like oil and minerals, is renewable and responds to demand.   

Young people in developing countries, and their families, base their decision on whether or not to invest in higher education on a number of factors. Crucially, a degree should result in increased economic opportunities for it to be worth the investment. In many countries the labour market is not able to accommodate a large number of skilled workers, let alone pay them high salaries. So there is no guarantee the degree will contribute to a better future within the country's borders. Consequently, the option to look for work abroad can be a powerful incentive to continue studying. Since in the end not everyone that makes this choice will actually emigrate and some that do will return after a while, the net outcome is a higher number of well educated citizens living in the developing country.  

This positive effect of skilled emigration on the level of education has been observed in the Philippines and Fiji, among other countries. The risk of a drain of human capital does not seem to be so serious after all. In practice, enrolment in higher education increases when people know that they will be able to use their expensively acquired skills somewhere. This more than compensates for the loss of some graduates and supports domestic economic growth.  

To be sure, every country is different and there is no guarantee that the positive effect of migration on education will dominate in every developing country. But the fact that it does routinely occur, is yet another reason to reject the simplistically negative framework of the brain drain.

Brain gain should be accepted as the better – because more realistic and more constructive – way of viewing skilled migration from developing countries. This has some implications for the right government policy regarding this issue. Clearly, it does not make sense for governments to design policy aimed at keeping skilled workers in their birth country. Neither should they try to limit the possibilities to work in another country. Recruitment bans and migration taxes ought to be a thing of the past.

Instead, the focus should be on making skilled worker migration as beneficial as possible for all parties concerned. Ways to achieve this have been suggested in a 2013 policy brief by the Migration Policy Institute. It recommends countries work together to stimulate skilled migration and see to it that it happens in the best way possible. For this, bilateral agreements are needed.  

Clear rules and standards must be set, so that people feel secure of their ability  to migrate. Worries about the international recognition of diplomas should not be influencing someone's decision on whether or not to go look for work in another country. The same goes for the recognition of working experience.

The destination country also benefits from the training that migrants have received. For this reason, it might be wise to set up a scheme for this country (or its companies) to co-finance education in the origin country under certain conditions. These conditions could include an obligation for the student to work in this country for some years after graduating. The more developed country would get skilled workers at lower costs than if they had had to be educated at home, and the developing country can benefit from the results of skilled migration without having to bear all the costs for it alone.

However, before all these fruitful policy suggestions can turn into reality, the true consequences of skilled worker migration need to become commonly known. The oversimplified view of this type of migration as being a one way street, where all the economic value leaves the country along with the migrant, should be abandoned.

The brain gain means more exports, extra purchasing power in the form of remittances and a higher average level of education for developing countries. If governments on both sides of the relationship embrace it and create regulation to steer it in the right direction, it can do even more to benefit destination and origin countries alike.

Economic migration is of course a different matter entirely from migration caused by war and terror in the home country, which is the case for the many refugees coming to the European Union nowadays. Still, the debunking of the brain drain myth has relevance for this discussion as well. Clouded as it is by strong emotions and dogmatic thinking, it is important to at least try to get the economic facts right.

Educated people leaving does not necessarily hinder the possibility of a brighter future for their home country. Giving refugees the opportunity to integrate in their new country does not equate to stealing the future of their birth country.

Denise Coenegracht is a graduate student in Philosophy, Politics and Economics at Leiden University and works as a labour market coach for the Dutch Council for Refugees.