Brain drain
Brain drain and inequality across nations
Is the brain drain a curse or a boon for developing countries?
Authors:
F. Docquier
Publisher:
European Development Research Network , 2006
This paper reviews existing literature on brain drain from developing to developed countries, its determinants and the way it affects the well-being of those left behind. Although the brain drain is a major source of concern for origin countries, the author argues that it is more than likely that skilled migration induces some positive effects on developing countries through e.g. remittances, return migration, diaspora externalities, quality of governance and increasing return to education.
The author suggests that a limited but positive skilled emigration rate can be good for development. He argues that the optimal skilled emigration rate varies across countries, and depends on factors such as population size, political environment, education policy and level of development. The author estimates that the threshold emigration rate above which the brain drain becomes harmful for development is 15-20 percent in low-income countries, while the average optimal emigration rate (maximizing country gains) probably lies between 5-10 percent. The author notes that about 23 percent of developing countries exhibits a brain drain smaller than 5 percent (41 percent exhibit a brain drain smaller than 10 percent), but that the majority of sub-Saharan and central American countries are well above this threshold.
To the extent that immigration policies of destination countries can discriminate among migrants of different origins and in different occupations, the author suggests that it would be possible to design quality selective immigration policies minimizing the losses and/or maximizing the gain from labour mobility. This could be coupled with specific incentives to return migration to those countries most negatively affected by the brain drain, and promote international cooperation aiming at more brain circulation.
The author further suggests that a tax on brain would be beneficial for human capital formation at origin only in case of a detrimental brain drain (compensation principle). In the case of a beneficial brain drain, such a tax could harm the migrants’ home country. The author argues that a ”fair” tax rate on brains varies across countries. Small and low-income countries (the expected losers) clearly deserve a larger share of the pie than large middle-income countries (the expected winners).
