Eight Questions About Brain Drain

John Gibson, David McKenzie
2011

Summary

What does empirical evidence tell us about ‘brain drain’? This paper concludes that new evidence should assuage some common concerns. Overall, brain drain rates are not skyrocketing. Africa is not the most affected region for brain drain; small island states are. Brain drain rates are highest from countries with small populations, those experiencing political instability, and those offering poor career prospects. Most skilled migrants are not health professionals, and the rise in skilled migration does not appear to be crowding out migration opportunities for unskilled migrants. Further, skilled migrants are remitting back to their home countries about as much as the fiscal cost of their absence.

The term ‘brain drain’ is most commonly used to denote the migration of very highly skilled professionals with university training. Brain drain worries many policymakers in migrant-sending countries. Governments complain about decimated medical systems, shortages of teachers and engineers, and poaching of talent that their national education systems had paid to train. Such concerns have gained prominence as many developed countries have moved to more skill-selective immigration systems and as the spread of HIV/AIDS in sub-Saharan Africa has highlighted constraints facing medical systems in those countries.

The percentage of the tertiary-educated population of the average developing country actually living in higher-income countries is 7.3 percent. However, this proportion varies widely – from 5.4 percent or below in developing countries with populations of 40 million or more, to 13 percent in sub-Saharan Africa, and 45 percent in small developing island nations.

Much of the popular debate about brain drain concerns the migration of doctors and nurses. However, health professionals have lower emigration rates on average than other skilled professionals. Additional findings relate to questions such as the following:

  • Is brain drain increasing? Both skilled migration and skill levels in migrant-sending countries are rising: the brain drain rate has remained stable.
  • Is there a positive relationship between skilled and unskilled migration? The evidence suggests a strong positive association—and thus that attempts to limit one form of migration are likely to affect the other.
  • What makes brain drain more likely? The strongest association is with country population size – that is, countries with less population have a higher proportion of brain drain. In addition, brain drain rates are higher in countries with fractionalization and political instability, and with low levels of human capital. Emigration decisions seem to be driven more by lifestyle and family considerations and by career development opportunities than by potential earnings.
  • Does brain gain exist? ‘Brain gain’ theories suggest that countries’ human capital levels benefit from individuals who are motivated to invest in their education by the prospect of future migration, but then do not migrate. Such claims should be treated with caution. However, evidence indicates that international migration can increase human capital levels through 1) the use of remittances and repatriated savings to help households pay for schooling; and 2) individuals who acquire schooling abroad, then return to their home countries.
  • Do high-skilled workers remit, invest, and share knowledge back home? Empirical evidence does support the idea that high-skilled migrants remit, and that the level of these remittances can be sizeable relative to per capita income in their home countries. Less evidence is available about the extent to which high-skilled emigrants engage in knowledge flow or return investment.
  • What do we know about the fiscal and production externalities of brain drain? The fiscal return from government providing training depends on the incomes the high-skilled would earn if they had remained at home and the progressivity of the tax system. For example, annual fiscal losses through brain drain have been calculated as $500-1000 per migrant in Micronesia and Tonga, which have low and quite flat income tax rates, and $5,500-6,300 in Ghana, which has a higher and more progressive rate. These fiscal costs are the same magnitude or less than the amount remitted by high-skilled emigrants. Existing preliminary estimates of the production externalities of brain drain are quite small, and evidence on health externalities from health worker migration is inconclusive.

Source

Gibson, J., and McKenzie, D., 2011, 'Eight Questions About Brain Drain', Policy Research Working Paper 5668, World Bank, New York