From Brain Drain to Brain Gain

It has been a seemingly universal law of migration that outmigration is a bad thing for the sending community, because the migrants tend to be younger and among the more ambitious. When they leave, things are worse than they were before--the brain drain is a bad thing. In a new book (Exceptional People: How Migration Shaped Our World and Will Define our Future, by Ian Goldin, Geoffrey Cameron, and Meera Balarajan), which is reviewed and extensively commented on in this week's Economist, the authors show that the world is different than it used to be--the brain drain has become a brain gain. It is not that migrants are any different than they used to be; rather the world is a very different place than it used to be. There are two very important pieces to the puzzle--the ease with which migrants can stay in touch with and potentially return to their country of origin, and the ease with which remittances can be sent back home. The transfer back home of new skills and knowledge, along with the money, are important components of lifting the sending countries out of poverty.

As the Economist's own analysis suggests:

The possibility of emigration may even have beneficial effects on those who choose to stay, by giving people in poor countries an incentive to invest in education. A study of Cape Verdeans finds that an increase of ten percentage points in young people’s perceived probability of emigrating raises the probability of their completing secondary school by around eight points. Another study looks at Fiji. A series of coups beginning in 1987 was seen by Fijians of Indian origin as permanently harming their prospects in the country by limiting their share of government jobs and political power. This set off a wave of emigration. Yet young Indians in Fiji became more likely to go to university even as the outlook at home dimmed, in part because Australia, Canada and New Zealand, three of the top destinations for Fijians, put more emphasis on attracting skilled migrants. Since some of those who got more education ended up staying, the skill levels of the resident Fijian population soared.

Thus, the argument is made that migration is good for the migrants, good for the receiving countries, and surprisingly good for the sending countries. Yet, most people in the richer countries are still generally opposed to immigration. Why?

Immigration is unpopular in rich countries because people overestimate its costs and underestimate its benefits. An influx of unskilled migrants may drag down the wages of unskilled natives, but this effect is “very small at most, and may be irrelevant”, according to a number of different studies. Migrants often create employment for natives. Indian entrepreneurs in San Francisco create new technology firms. Mexican nannies hold babies while American mothers go out to work. Migrants come when their services are wanted and stay away when they are not. Through the migrant grapevine, they know that jobs are drying up several months before government statisticians notice.

Since the future holds the promise of a demographic fit between aging richer countries and still youthful developing nations, migration is likely to be a fact of life, and a constant bone of contention, for the rest of this century.