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More on brain drains (because, yes, I’m a nerd)

More on brain drains (because, yes, I’m a nerd)

Last updated on: January 15, 2018 at 8:53 am by Jane the Actuary

More on brain drains (because, yes, I’m a nerd) 2018-01-15T08:53:11-06:00 Jane the Actuary

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So the other day I wrote about the “brain drain” and vaguer “ambition drain” issue that may be impacting places like El Salvador and Haiti, and I wanted to spend some more time thinking about this issue. Of course, to prevent “brains” from leaving a given country, Berlin Wall-style (because that is what they built the Berlin Wall for, not merely to imprison the population — it’s my understanding that the elderly were allowed to move to the West, once they were no longer able to productively contribute to the economy), would be a violation of human rights, but that doesn’t necessarily mean that a country’s public policy should encourage it, and its public discourse cheerlead it.

Who does it help, and who does it hurt, that educated, ambitious people from sh**holes are immigrating to wealthier countries?

Obviously it helps the migrants themselves tremendously. And the general consensus is that it benefits the receiving country by providing comparatively cheaper labor for the sorts of jobs they do; it’s also not hard to find immigration supporters who praise high-skilled immigrants as particularly inclined to entrepreneurship.

There’s also a case to be made that the departure of the educated and ambitious benefits the sending country. The relevant video at Marginal Revolution University (yes, generally I’m not a fan of videos but this was the best entry point into the issue I could find) proposes the alternate label “brain gain” and says that the sending country benefits in three ways:

The availability of jobs abroad increases incentives for individuals to become educated; once they have become educated, some of those people, even if they had initially planned to leave, will end up marrying, finding a local job, needing to care for parents, or just generally having a “change of heart.”
The fact that skilled workers leave the country means that the labor market for skilled workers will become tighter, increasing wages and, again, providing an incentive to the people of that country to become educated.
And, of course, the remittances those workers send home will benefit the local economy, and some of the money will be used to educate relatives.

The video “instructor,” Tyler Cowen, cites the example of India as a case where expatriates from India ultimately used their money, talent, and business connections to build up the local economy.

The video also cites two key sources for further reading, “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?” by Michael Clemens, and the results of a google search for “gibson mckenzie brain drain”, of which the most promising seems to be “The Economic Consequences of “Brain Drain” of the Best and Brightest: Microeconomic Evidence from Five Countries,” a 47-page analysis. Which (ugh) feels like I’ve just given myself a homework assignment.

Reading (OK, skimming) through these two papers reinforces the content of the Marginal Revolution video: Gibson and McKenzie calculate that the “externalities” of high-skilled emigrants — that is, the quantifiable cost to their home countries for their departure — amounts to 2% of the income gain that these emigrants have in their new home countries. However, some of the claimed benefits, such as the business development in those home countries due to the emigrants’ connections, appear to be minor outside of a few prominent cases (India, China, Taiwan). The Clemens paper, as its title suggests, proclaims that emigration of the highly-skilled is basically just “free money” in terms of the overall increase in world GDP, and scolds those who would try to measure the benefits of emigration by looking at national gains and losses. Besides, he argues, given, for example, the number of Haitians who have escaped poverty by leaving Haiti, the availability of emigration is a spectacular anti-poverty program for Haitians, as an ethnic group, even if not for Haiti, as a nation. And he disputes the idea that a person of Haitian birth has any greater obligation to serve as a doctor in Haiti, and the failure to fulfill that obligation is any greater a “cost,” than someone born in the United States.

But here are some thoughts, while fully acknowledging that I lack expertise or extensive study of the data:

In the first place, the idea that having the ability to migrate benefits the sending country, because of an increase in the number of people motivated to get an education, seems like it would require a particular situation in the sending country, that higher education is available to all who seek it, rather than being very difficult to acquire. If the number of university slots is fixed in some manner, then emigrants cannot be replaced by remain-ers in expanded university cohorts. At the same time, the idea that it’s to a sending country’s benefit to lose some portion of its skilled workers, only makes sense if there is a surplus of those workers, and nothing productive they can do, so that they’d be stuck ragpicking or the like, absent the ability to leave. It also implies that, if unable to leave, there is no way that those workers could contribute to the country through entrepreneurial activities — that the country is dependent on foreign capital or foreign expertise to create jobs, and in the meantime can only passively wait for those jobs to be created. And, finally, there’s the question of whether the cash in circulation due to those remittances is put to use productively. (I recall reading about the effects of emigration on Italy in the late 19th/early 20th century–I may be wholly misremembering, but it seems to me that the workers generally sent money home, or returned home with the money they’d earned, but part of the trouble was that everyone was chasing the purchase of land, and just driving up its price.)

So the Philippines, for instance, sends out a great many housekeepers to the oil-rich Arab countries, but also sends out nurses to the U.S. and I recall an article in which Switzerland was particularly happy to recruit them. If the Philippines has built up its nursing school infrastructure, basing it of high levels of education in general, so that “nurses” has become an export industry, and it can educate its nurses efficiently enough that the remittances it gains by sending them abroad more than make up for the cost of their education, this idealized model would work very well.

As it happens, they rank 99th in the world in terms of the number of doctors per 1,000, and 155th in terms of hospital beds per capita. (There seemed to be no such ranking for the number of nurses.) But at least one article claims (as of 2011) that there is a very extensively built-up infrastructure of nursing schools, producing numbers of nurses that far exceed local demand. This differs from a 2002 article that worries that they’re aren’t enough nurses to keep hospitals running, because they’re all being recruited abroad, which suggests that during the 2000s, the Philippines indeed built up its nursing school capacity. Wikipedia reports, however, that, although the increases in nursing schools increased the total number of nurses, it is still the case that the most skilled and experienced nurses leave the country and the Philippines is left with the less skilled and less experienced nurses to staff its hospitals, and still experiences shortages in rural areas. In other words, building out nursing school capacity can only go so far in providing more of the beneficial and fewer of the harmful effects, since the more and the less talented nurses are not leaving in the same proportion. The Wikipedia article (which has a stronger opinion orientation than usual and cites sources dating from the mid- to late-2000s) concludes this section as follows:

In summary, the emigration of Filipino nurses has encouraged doctors to switch to nursing, created a shortage of skilled specialized and experienced nurses, affected the education system, and distorted health care delivery and attention to medical issues in rural areas. While remittances, return migration, and the transfer of knowledge support the Philippines, they fail to fully compensate the loss of health workers, which disrupts the Filipino health and education sectors.

Dr. Jaime-Galvez Tan, the former Philippine Secretary of Health, warns that if the U.S. passes legislation allowing for freer immigration of nurses the health service of the Philippines could collapse.

So does that mean that the emigration of Filipino nurses has been a disaster? No, of course not. Nursing shortages in the Philippines have to be balanced against the possibility that, were nurses unable to leave the country, its unemployment rate would be higher, with large numbers of women who are now nurses abroad, living at home but unable to support their families.

So I’m not persuaded by my brief look at the data that emigration of high-skill, high-ambition individuals is an unmitigated good. And my concern is more a matter of intangible factors that can’t easily be quantified in a mathematical model. If a country is to overcome its sh**holeness, it needs dynamism, it needs young people with energy and ambition, and intelligence and high degrees of education, and I am not persuaded from those articles that the available evidence points to a net gain, as hypothesized, in those characteristics, from an increase in motivated/educated people that exceeds the net number who go abroad, at least in the poorest and most brain-drainy countries.

Demographers have coined the term “demographic dividend” to refer to a country whose fertility is declining reaching that “sweet spot” with lots of young people, who, in turn, have comparatively fewer children to care for. To take the example of Mexico, now seeing a measurable number of emigrees returning home, from a 2014 article,

As families have become smaller, the number of young dependents relative to the number of working adults has declined, producing what is known as a “demographic dividend.”

Typically, when this happens, economic development accelerates; but previously Mexico was not able to leverage this change because so much of its working-age population was migrating north. With waves of people coming home [e.g., due to the ridiculed “self-deportation”], the equation has changed.

The article then describes the positive effects that the return of migrants to the U.S., especially in cases of young adults who bring English fluency, and a few cases of students who choose a (free) Mexican university, but observe that if returnees never learned English or any job skills in the U.S. and return in middle age (e.g., to care for aging parents), they’re no better off.

(Side note: it would be a good idea to look at the Asian Tigers, and what role emigration did or didn’t play in their economic development, as well as what can be discovered about those European countries which saw high levels of immigration in the 19th and early 20th centuries.)

Again, I would not say that individual countries should attempt to force their citizens to stay at home; it’s just a matter of policy and attitudes in receiving countries. But it seems as if these models for brain-drain-type emigration don’t leave much room for the economic development of the sending country, leaving them, instead, to be forever the source of brains and workers, a sort of New Hinterland, serving as breeders and educators of the developed world’s supplemental workforce. There’s an opportunity cost to the Best and Brightest leaving the country, if that means that you lose exactly that category of people who would otherwise develop their own economy or who would, as an educated and skilled middle class, demand a well-run government, say, in El Salvador, those who would supply the leadership, and the critical mass of support, to reduce the power of the gangs.

Image: https://pixabay.com/en/brain-human-anatomy-anatomy-human-1787622/

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