The benefitting a more developed country. Furthermore,

The term brain drain (or “human capital flight”) refers to
when qualified or highly trained individuals emigrate from one country to
another, in order to benefit from better working conditions and increased pay. It
is typically the movement of people from less economically developed countries
to more highly developed countries, and so we would assume it results in only
disadvantages for the source country (the country where individuals emigrate
from), however this is not always the case. Indeed, highly qualified
individuals leaving a country could result in decreased growth of education and
healthcare, as well as other public sectors, yet this does not take into
account the contributions of expatriates to their home countries. With growing
mobility, information and knowledge between countries, emigration has been
increasing exponentially throughout the last decade and developed countries
have been actively trying to attract skilled labour by implementing policies
that developing countries cannot afford. Moreover, with many educated
professionals being trained in their home countries prior to emigrating, with
source country taxpayers bearing the brunt, developed countries can further reap
the rewards. In terms of the source country, brain drain may not be as
detrimental as we would initially believe, however there are many factors at
work that determine whether it is a benefit or a drawback.

As brain drain is the movement of skilled individuals
from less economically developed countries, it is clear to see that it will be
disadvantageous to these countries, in particular in terms of quality of
education and healthcare. Bhagwati & Hamada (1973) used the previous idea
that the skilled individual who leaves, takes away only the value that he would
have earned for himself anyway and tried to see the limitations of this idea,
arguing that there would still be a loss to those left behind. Their notion was
that “if the social marginal product exceeds
the private marginal product…then again there is a loss to those left behind”
(Bhagwati & Hamada, 1973, p.19), referring to doctors and other exceptional
academics that the home country would worry about losing, as their social
marginal product is extremely high and they will now be benefitting a more
developed country. Furthermore, we have to take into account whether the state
has financed their education or not and whether this individual has been taxed.
A country with progressive taxation will rely on these individuals’ taxes in
order to benefit people on lower incomes, and so brain drain will decrease
their welfare (Bhagwati & Hamada, 1973).

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The
loss of skilled professionals can hinder development and growth in a country
greatly. Losing more and more accomplished teachers will lead to a decline in
the quality of education over time and will affect further generations to come.
The next generation will have fewer qualified people due to the decline in
quality of teaching, which is a barrier to growth and can lead to more poverty.
The advantages of better schooling transcend purely economic growth. Education
can also been seen as “a process of re-learning the collective knowledge of society for each successive
generation and learning from social and political mistakes. It is thus a core
mechanism in cultural reproduction and historical social learning and
development.” (Nunn & Price, 2005, p.8), and the loss of this social
knowledge can lead to societies lacking in particular emotionally intellectualism
that results in more well-integrated societies. As well as this, specific
families will lose family members, which can disrupt social cohesion and also
cause large gender disparities. In some less developed countries, families can
only afford to send (or only choose to send) males to school, meaning it will
often be men that are making up the large percentage of brain drain, and women
staying in the home countries with lower education levels.

On the
other hand, some argue that brain drain can be beneficial to the education in developing
countries. “The possibility of migration to a higher wage country raises the
return to education. This leads to an increase in human capital formation which
can outweigh the negative effect of the brain drain itself.” (Mountford, 1997,
p.288), meaning that an increase in brain drain will result in more people
wanting to pursue higher education due the prospect of moving to a more
developed country in which they can earn more and have better working
conditions. Commander et al (2004) described this as “a positive signal that
motivates others in the sending country to acquire more education, thereby
raising human capital and possibly promoting growth.” and showed that education
of even some individuals has large positive spillover effects that can benefit
all in a country. Along with this, Mountford (1997) believed that it created
“educational classes” within an economy, which gives reason to the use of
emigration quotas. Emigration quotas allow governments to let only a certain
amount of individuals emigrate in order to create a balance in which skills can
still be accumulated in their countries. Creating these educational classes
allows a variety of people with different skills to both emigrate and stay in
their countries to allow for more growth and development at home.

A further
factor determining whether or not developing countries should be worried about
brain drain lies in how individuals value education in terms of uncertainty and
imperfect information. As mentioned before, poorer countries with less
potential for growth and lower levels of brain drain are unlikely to gain more
human capital as there is less perceived possibility for higher earnings. This
means there that is uncertainty in the population over whether pursuing higher
education is necessary and whether future migration opportunities exist (Beine
et al, 2001). Many may achieve sought after degrees that do not lead to job
opportunities abroad and therefore they may feel that it was not worth the
money that they have paid. In addition to this, taxpayers will have higher
costs that do not result in the payoffs one would expect. Miyagiwa (1991)
explained how asymmetric information can also be disadvantageous to source
countries.  “Source-country employers are
assumed to possess imperfect information about the skills of foreign-trained
students and hence they can only offer wages based on the average quality of
the returnees. By contrast, employers in the host country know the true abilities
of the students studying there and pay commensurate wages.” (Miyagiwa, 1991,
p.744), which means that these individuals are more likely to stay in host
countries as they will earn more there, in comparison to their home countries,
where employers aren’t as aware of their value and so do not pay them as such.
Because of this, there is not incentive for these skilled individuals to return
home and the money they earn is not likely to benefit those in their home
country. In this case, brain drain will be a loss to developing countries,
unless policy-makers intervene in order to create higher wages for those with
high value degrees or other skills.

Another
large worry concerning emigration is the migration of medical professionals.
Healthcare resources in less developed countries are already strained, so with
the loss of these skilled workers, the situation will worsen and inequality
will rise. Many African countries have high amounts of brain drain, which is
concerning due to the fact that these countries are some of the most
impoverished and are in need of the most aid and increased quality in
healthcare. Almost half of South African medical school graduates emigrate to
the developed world and more than 18,000 nurses trained in Zimbabwe work abroad,
which is a substantial benefit to places like the UK in which it is estimated
that 31% and 13% of doctors and nurses respectively are born abroad (Pang et al,
2002).  Further inequality is seen in the
emigration to the US, as “The migration of over 5000 doctors from sub-Saharan
Africa to the USA has had a significantly negative effect on the
doctor-to-population ratio of Africa. The finding that the bulk of migration occurs
from only a few countries and medical schools.” (Hagopian et al, 2004, p.1).
Hagopian et al’s (2004) research showed that 79% of Africans were trained at
just 10 medical schools, revealing the strain at which some countries are
under, and the inequality preventing growth in these countries.

There are
however, some countries such as Thailand and Ireland where they are creating
programmes in order to try and reverse brain drain (attract medical
professionals back into the country) by offering increased funding for research
and other monetary incentives (Pang et al, 2002). Policies like this that can
be implemented by the government will help to reduce the negative impacts of
brain drain and reduce global imbalances in order for inequality to fall and to
raise both GDP in developing countries as well as living standards. Further
government policies such as emigration quotas, as discussed earlier, can help
to retain skilled workers at home, however these policies are often only
“retaining those who are mediocre professionals while the brightest continue to
emigrate” (Miyagiwa, 1991, p.743).

A common
argument for the advantages of brain drain is that expatriates will continue to
contribute to their economies through remittances (sending money home, for
example back to family members). If these remittances outweigh the loss
incurred from brain drain, then they can indeed benefit the senders of
unskilled migrants. Skilled migrants become wealthier by emigrating to
developed countries and therefore can afford to send more money back to source
countries, which can not only benefit individual families but the economy as a
whole. Resource repatriation over time can “provide essential inputs to new businesses
and activities in the sending country” (Commander et al, 2004, p.235) as these
families receiving the remittances will have an increase in disposable income,
increasing their propensity to consume, giving businesses more confidence and
funding to expand and earn more. The increase in remittances has been growing
dramatically over time, and are “are estimated to have increased from US$58
billion in 1995 to US$167 billion in 2005, with recent estimates putting their level
at over $200 billion…making remittances the second largest source of external
funding for developing countries after foreign direct investment” (Niimi et al,
2010, p. 124). This is due to the fact that the amount of migrants has
increased as well as their income. Moreover, improvements in the financial
services industry as well as easier access to financial markets reduces the
cost of remittance and promotes the use of these channels. The rising focus on
these increases in remittances has caused governments to create policies to
benefit migrants wanting to send money home and further promote this as a
method of increasing growth.

We can see
that remittances are an advantage for source countries, yet some claim that
even though skilled migrants should have the propensity to remit more, they in
fact do not, and an individual’s education level does not affect how much they
remit. Faini (2007) argued that educated professionals are more likely to come
from wealthy families, as they are able to fund their children’s education.
This means that there is less incentive for these migrants to send money home
as there is less demand for remittances from their already well-off families.
Furthermore, migrants tend to spend more time abroad, choosing to see family
members in the host countries rather than travelling back home as they now have
the money to afford this, which does not benefit the source country.
Additionally, there is very little evidence to show that an individual’s
education level dictates how much money they will remit. Indeed, there has been
an increase in remittances in general, however it does not prove that more
educated migrants remit more than less educated migrants. With skilled migrants
moving abroad and earning more, there is also the possibility of them moving
their entire families to more developed countries. It follows logic that “skilled
migrants are able to bring their families along with them, as they tend to
enjoy more secure legal status at the destination” (Niimi et al, 2010, p.124)
as migrants living in these countries for a significant amount of time can even
become citizens. Along with their increased income, this will make it much
easier to sponsor other family members to emigrate. We can now see that there
are more variables at work in terms of how beneficial remittances are to source
countries, we must look at factors such as family members’ incomes in source
countries and how developed their financial sector is, to ease the flow of
these remittances. As well as this, increases in population and expected
economic growth within a country are elements that will affect how advantageous
these repatriations are. It is clear that while repatriations are an important
inflow for an economy, it is not them alone that determines the importance of
remittances within developing countries.

It is not
just monetary repatriations that are beneficial to an economy, but the transfer
of skills back to source countries. Instead of a brain drain, this transfer of
knowledge leads to what is more accurately a “brain circulation”. With the
increase in digital technologies and transportation and communication costs dropping,
knowledge and skills transfers between countries is now easier than ever,
meaning that the extent of the loss of skills through brain drain is now limited.
“By 2000, over one-third
of Silicon Valley’s high-skilled workers were foreign-born, and overwhelmingly
from Asia.” (Saxenian, 2005, p.35), in particular Indian and Chinese born entrepreneurs
and engineers are not only providing high value skills to their host countries,
but through increased digitisation are transferring knowledge back to their
home countries, therefore helping the growth and development of the IT
industries in these countries. Furthermore, by taking advantage of low cost
education in their home countries before emigrating, this is a benefit for both
the individuals and the countries they migrate to. There are many ways in which
these skills are repatriated, for example some “return home
to establish business relationships or to start new companies while maintaining
their social and professional ties to the United States” (Saxenian, 2005, p.36)
and furthermore, it is not only technical skills and ideas that can have a
positive effect on a country. “As experienced engineers and managers return home…they
bring the worldviews and identities that grow out of their shared professional and
educational experiences.” (Saxenian, 2005, p.36), which shows that it is not
only the technical knowledge itself, but entrepreneurial, managerial and
efficiency know-how that help a country to develop. A further benefit of the
knowledge transfer is that some of the people who emigrate become “transnational”
whilst working abroad and can maintain citizenship in multiple countries. This
makes it easier for them to work and travel between the two countries and, as
mentioned before, helps them to bring over other family members if they wish to
do so. With policy-makers in government helping to promote technology-forward strategies,
less developed countries, with the help of brain circulation, can develop IT
industries that make them more competitive worldwide, leading to increased job
opportunities for skilled professionals in this country. This could result in
more people wanting to study and train to go into these industries, further expanding
them.

To conclude,
there is evidence that brain drain can be both a blessing and a curse to
developing countries. The loss of highly skilled individuals such as medical
professionals and teachers can take a toll on a country’s quality of healthcare
and education, and lead to large global imbalances. Education and healthcare
are imperative to a country’s development as improving them creates long term
growth for generations to come, by ensuring a larger skilled workforce. However,
we have also seen that there are many factors that offset the disadvantages of
brain drain.  Skilled professionals
emigrating can provide a signal to motivating others to pursue higher education
and either emigrate themselves or be in higher positions and roles within their
country. Furthermore, with these migrants having family still at home, there is
a large source of income for their home countries in terms of remittances.
Indeed, there are many variables affecting whether remittances are as
beneficial as they may initially seem, including family members’ incomes in
source countries, however the drastic increase over the last few decades
suggests that it is a large inflow for less developed countries. Thinking long
term, we find that the “brain circulation” caused by migrants’ knowledge being
transferred back to their home countries is invaluable in the development of
both the source and host countries, with intergenerational transfers affecting
the population for years to come and introducing new ideas to them that they
otherwise wouldn’t have been exposed to. We can see that perhaps it is only by
governments using policy interventions to limit which types of people can
emigrate that brain drain can be controlled so that it is at the optimal benefit
for poorer countries.

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