CGD in the News

The Myth of Brain Drain: How Emigration Can Help Poor Countries (Harvard Political Review)

October 23, 2018

By Satish Wasti

From the article:

In today’s era of globalization, migration affects virtually every country, rich or poor. Much of the migration discourse, however, is predominantly focused on how immigration affects rich countries, while emigration’s effect on poor, migrant-sending countries has received very little attention. While there is now a widespread agreement amongst economists on the net benefits of migration for destination countries, no such consensus exists regarding the relationship between emigration and development in poor countries. Indeed, the developing world is increasingly concerned that too many of its skilled and educated citizens are moving abroad. This exodus of the best and the brightest — the so-called “brain drain” — is supposedly depleting the stock of human capital of poor countries and hurting their prospects of economic development.

This concern is not unsubstantiated. Since the 1960s, the world has seen increasing levels of migration from low-income to high-income countries. Research has shown that for virtually every migrant-sending country, the skilled emigration rate is substantially higher than the average emigration rate. This means that poor countries have experienced a huge outflow of skilled workers in the past half-century. Empirical observations indicate that this phenomenon is particularly pronounced for developing countries with relatively low populations. For instance, 85 percent of Haitian college graduates are working abroad, as compared to 5 percent of educated Indians or Chinese.

When emigration is understood in terms of the immediate brain drain it results in, this scenario indeed looks very gloomy for low-income countries. But it is a mistake to understand emigration in this way. Contrary to the intuition of brain drain, the long-term interaction between emigrants and their countries of origin has huge potential for the development of poor, migrant-sending countries. Because emigration can improve the prospects of the origin nation, developing countries should cease efforts to limit skilled emigration and seek to realize the development potential presented by emigration.

Policymakers in the developing world should also try their best to entice the emigrants back to their native countries permanently. Young people that emigrate to developed countries, acquire education and experience, and then return home add to the stock of human capital and an promote entrepreneurialism in their home countries. A study of returning Turkish migrants from Germany finds that about half of them started their own business following the return. Likewise, returnees from advanced democracies can act as an often-needed voice for good governance.

To encourage return migration, developing nations can learn from the example set by China. Since the beginning of this century, China has seen an increasing rate of return migration. Chinese policymaking has supported this trend. “In order to attract the emigrants back, a government should have a talent plan which should be matched with the economic plan,” Huiyao Wang, president of the Center for China and Globalization, told the HPR. In China, the government has established talents programs and returnee entrepreneurial start-up parks, all aimed at encouraging emigrants to return and contribute to economic development. While return migration in China is more a consequence than a cause of development, it offers a great example on how return migration can be aligned with the country’s development goals.   

By encouraging return migration, bolstering the connection with migrant networks, and facilitating the flow of remittances, origin country governments can integrate migration into their development efforts. But this needs to be preceded by the realization on the part of policymakers in poor countries that despite the initial brain drain, skilled emigration can contribute to long-run economic development. “Emigration has been a part and parcel of the development process of essentially every country that has succeeded in developing,” Michael Clemens, a senior fellow at the Center for Global Development and a leading expert on emigration economics, told the HPR. Rather than an impediment to development, skilled emigration should be understood as an opportunity for poor countries to realize their development dreams.

Read the full article here.