Getting More by Letting Go

by Will Wilkinson on October 25, 2008

Kerry Howley reports on a new paper by the inestimable Michael Clemens examining a remarkable natural experiment in Fiji, the results of which further demolish “brain drain” arguments against skilled emigration. Kerry nicely captures the intuitive-once-you-think-about-it-a-second principle at work:

People locked in poor countries do not fail to invest years studying theoretical physics because they lack the appropriate imaginative capacity. If no one can afford to hire a cardiologist, no sane person is going to waste a decade studying to be one. Migration increases the returns to higher education. It transforms a questionable investment into one worth making.

stuart

Theres some good research on this at the moment.
Another good article is 'Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers' by Michel Beine, Fre´deric Docquier and Hillel Rapoport, in the Economic Journal

They used data across 127 countries and found that skilled emigration had a positive effect across the developing world as a whole, however there was certain regions which lost significantly from emigration. The losers were Sub-Saharan african countries and Central American countries.

The found that where skilled migration was less than about 20% (figure is off the top of my head, might be slightly different) of total skilled workforce that countries gained from increased investment in education however when migration was of a larger proportion, the 'brain drain' from the loss of skilled labour outweighed these positive effects.