Emigration for Development? An Exploration of the State's Role in the Development‐Migration Nexus: The Case of Romania

This article explores the proposition that the developmental potential of emigration depends on the context of the sending countries. It builds on the insights from the institutional approach to development and adapts them to the migration‐development nexus. It argues that government involvement is necessary if resources from emigration are to become seeds for development. By analysing the case of Romania, one of the largest labour sending countries in Eastern Europe, it argues that its laissez‐faire approach is likely not enough to capitalize on emigrants' resources for development.     

Return of talent programs: rationale and evaluation criteria for programs to ameliorate a 'brain drain'

The term, brain drain, describes the loss of skilled professionals and the nonreturn of students from advanced study abroad. It is now used almost exclusively in reference to mobility from less developed countries to more developed countries. Controversy centers on whether needed skills are being drawn off unfairly at subsidized rates from developing to developed countries or whether excess capability is being utilized in developed countries rather than underemployed or wasted at home. Some causes of high level personnel migration include: 1) wage differentials between sending and receiving countries; 2) absence of opportunities for career development or mobility for reasons other than merit or accomplishment; 3) lack of high quality facilities, equipment, time, and other costly supports in developing countries; 4) employer's lack of knowledge of employee work and the resulting wages; and 5) political disagreement or persecution. Prospects for closing wage gaps and upgrading working conditions on a large scale in developing countries are dim. Growth of the labor force coupled with national needs that are not congruent with professions requiring costly facilities, supplies, and equipment make this a slim possibility. Increasing career mobility possibilities seems to be a more promising route to reducing brain drain. One form of preventive measure is offering study abroad which requires service at the end of the study period; a variation is to guarantee employment for university graduates or for certain sectors, such as scientists. Restructuring decisions on hiring and promotion would have a positive effect, as would developing a better evaluation of expected productivity by type of training. Successful return of talent programs will be relatively modest in terms of the number of people returning and should be thought of as a part of human capital investment. Programs that are concerned with filling positions rather than with luring talent home are more likely to be efficient. The employing agency should be involved and should have some flexibility in negotiation with employment candidates to curb the unnecessary use of resources. In summary, return of talent programs should be used as a tool for development that reduces the incentives for nonreturn from training of for emigration by experienced professionals, not as a brain drain cure.     

Multi‐sited accumulation of capital: Cape Verdean returnees and small‐scale business

In recent years, policymakers have portrayed return migration as positive for development. In both migrant sending and migrant receiving countries, policymakers expect the transfer of economic, cultural and social capital by returnees to stimulate economic growth. Inherent in these assumptions is the idea of a unidirectional flow of capital from northern countries of immigration to the countries of return. The objective of this article is to contest this idea of a one‐way transfer of capital through a case study of Cape Verdean returnee business owners. To what extent have they accumulated their various forms of capital before emigration, during their sojourn abroad or after return? In this article, I examine the returnees' multi‐sited accumulation of capital and how it corresponds to the resources they need to run a sustainable business. In addition, I analyse how they adapt capital accumulated abroad to the conditions in Cape Verde.     

The need to import skilled personnel: factors favouring and hindering its international mobility

Skilled migration has become a major element of contemporary flows. It has developed in scale and variety since the 1930s and now takes many forms, including “brain drain”, professional transients, skilled permanent migrants and business transfers. Nevertheless, the data are poor, inconsistent and usually not differentiated by sex. The importance of policies, both national and regional, to control the movement of skilled migrants has escalated. Receiving countries have come increasingly to see the benefits from admitting skilled workers and have adjusted their permanent and/or temporary migration laws/policies to facilitate entry, usually on the proviso that it does not disadvantage their own workers by taking away their jobs. Another set of policy frameworks within which skilled migration is occurring is regional blocs. The experience of the European Union (EU) in promoting the flow of skilled labour, movement in this direction in the North American Free Trade Agreement (NAFTA), Mercosul, the Closer Economic Relations (CER) Agreement between Australia and New Zealand and the Asia Pacific Economic Cooperation (APEC) Forum are analysed. The article poses two sets of issues facing sending and receiving countries. For sending countries they are: whether to free up or tighten migration; whether to support temporary skilled flows; whether to introduce protective or preventive measures to stem skilled emigration; how to encourage the return of skilled nationals; and whether/how to pursue compensation from post-industrialized countries. For receiving countries they are: whether to encourage temporary or permanent skilled immigration; the level of entry to permit/promote; how to select/process skilled immigrants; whether/how to protect the jobs of locals; and how they ensure the successful labour market integration of skilled immigrants. The article argues that the neo-classical view that skilled migration leads to overall improvement in global development does not apply. “Brain waste” or “wasted skills” occur frequently, to the detriment of both individuals and nations. Improved data and constructive dialogue on skilled migration are needed. Within both regional and international contexts, countries have obligations and responsibilities towards each other which need to be taken seriously.     

The Chinese Policy of Highly-Qualified Human Capital: A Strategic Factor for Global Competition in Innovation

International migration is a historical phenomenon, which only recently has gained increasing importance, representing a focal point on the political agenda in most countries. One of the reasons is the deep transformation occurring in last decades, both at global and local level, of the role played by its protagonists that are turning to be transnational agents. This is especially true for the skilled professionals, who migrate internationally. As a matter of fact, international human capital mobility is now regarded as “brain circulation” rather than “brain drain”: this new concept concerns individuals who maintain frequent and continued social, economic and political ties with their country of origin, exceeding thereby the territorial and cultural boundaries. In this scenario, China is one of the main sending countries of highly-skilled migrants, through which it can built economic and academic relations with other economic and technological advanced countries. Recently, Chinese policy makers have started to consider the brain drain phenomenon as an opportunity for the transmission of business and technological know-how, as well as tacit knowledge that is hard to find through official channels. This article intends to contribute to the scientific debate on the subject, highlighting the international relevance of the so-called Overseas Chinese Professionals (OCPs), investigating their spatial distribution and features. Besides, the paper will examine the emerging returning flow and the challenge that the country will have to cope with in the next future to impose itself as a innovative leading economy.     

GROWTH AND CONVERGENCE WHEN TECHNOLOGY AND HUMAN CAPITAL ARE COMPLEMENTS

This article presents a model of endogenous growth, in which a firm's technology and a country's human capital stock are complementary in the production of output. Production technologies are created by costly research and development (R&D) and are owned by firms that can freely choose where in the world to produce. Both production and R&D have a positive effect on a country's human capital stock. While all countries typically grow at the same rate in the long run, they differ in their levels of human capital, per capita output, and the quality of the technologies that are used in production. A country's relative position in terms of productivity is history dependent. Countries that start out with a lower human capital stock or industrialize later end up with a lower per capita GDP in long‐term equilibrium. (JEL O4, O33, O47)     

EU Integration & Emigration Consequences: The Case of Lithuania

This paper analyses the causes, consequences, and policy implications of Lithuanian emigration following the country’s European Union (EU) accession in May 2004. After placing Lithuanian emigration in its historical context, the study assesses the recent dynamics, including the driving forces and characteristics of Lithuanian emigration at both the international and domestic level. The study finds that the primary determinants of this movement are both demand‐ and supply‐side factors. On the demand side, the labour shortages, decline in the working age population, and desire for cheaper labour in Western European countries function to attract Lithuanian labour. Concurrently, lower wages, higher unemployment, and the generally less developed economic conditions in Lithuania are encouraging Lithuanians to take advantage of the greater mobility that came with EU accession. The expanding networks linking migrants and potential migrants are facilitating this out‐migration, as well as the social mind‐set by which emigration is a perceived solution to socio‐economic difficulties. This study concludes that the consequences of this new emigration reality are mixed. The free movement of workers has helped to relieve pressure on the domestic labour market, drive down unemployment, place upward pressure on wages, and increase the remittances rate to Lithuania. However, concern is not ill‐founded; recent emigration has introduced labour market shortages, placed greater demographic pressure on the country, and increased the likelihood of brain drain. This study argues, therefore, that while Lithuanian emigration cannot and should not be stopped, Lithuania does have policy alternatives as a sending‐country that will help to mitigate the costs of emigration and maximize the benefits for the country’s long‐term development.     

Theoretical Considerations and Empirical Evidence on Brain Drain Grounding the Review of Albania’s and Bulgaria’s Experience1

The objectives of this paper are: first, to briefly review the different theoretical aspects of brain drain and its potential positive or negative, direct or indirect effects on the economy of the home country; second, to highlight the limited empirical research on some of these issues; and third, to discuss on this grounding the empirical evidence on the nature and size of brain drain, as well as its impact on the economies of Albania and Bulgaria. As it appears, the evidence for these two countries and its evaluation as to whether brain drain has been or can be a threat to their development is contradictory and confusing, as it comes out from different casual observations without a convincing analysis. The relevant discussion has not escaped the stereotype way of thinking that the economy and society of these two countries would have been better had emigration of educated persons not taken place, or had those who migrated just returned. The conclusion on policy for brain drain and brain return is that merely hindering the emigration of educated people or trying to motivate their return cannot by itself elevate education and research to higher quality levels and promote development and growth. Without simultaneously developing a friendly and comprehensive institutional and pragmatic framework, such measures are often ineffective or even counterproductive.     

IMPORTED CAPITAL INPUT,ABSORPTIVE CAPACITY,AND FIRM PERFORMANCE: EVIDENCE FROM FIRM‐LEVEL DATA

Importing capital inputs has been recognized as a critical channel for technology transfer across countries. We examine whether and to what extent the productive impact of imported capital varies with firms' abilities to absorb new technologies using ordinary least squares, instrumental variable, and threshold regression estimators. We find that firms with higher absorptive capacity gain significantly more from importing foreign capital. Our results also suggest a threshold for such benefits. Furthermore, the productive contribution of skilled labor is significantly higher in firms that import foreign capital. Developing policies to augment absorptive capacity will help firms in developing countries to realize benefits associated with imported capital. (JEL F14, D24, L24, O33)     

Trends in Latin American Skilled Migration: “Brain Drain” or “Brain Exchange”?

During the last half of the twentieth century the Latin American sub‐continent, historically a region of immigration, became one of emigration characterized by intra‐regional movements and movements towards the developed world, particularly the US. The emigration of highly skilled resources was a new phenomenon in the 1960s and debate on “brain drain” took a significant place in academia and in international organizations. In recent years, within the context of intensification of the globalization process and by virtue of the drive for technological development and the subsequent demand for specialization, the issue has returned to both the arena of political debate and to the academic world. This article presents an analysis of trends in Latin American migration in the context of the new situation. It discusses whether there is a continuation of the “brain drain” phenomenon or the emergence of a trend towards “brain exchange” or “brain circulation”, as appears to be occurring in other parts of the world.     

Of Skilled Migration,Brain Drains and Policy Responses*

Developed countries are increasingly trying to attract skilled migrants, rarely giving any consideration to the impact that this migration might have on countries of origin. The debate on the “brain drain” is not new but it has taken on greater urgency in the context of a globalizing economy and ageing societies and this article reviews the evidence over time and space. It examines opposing interpretations of the impact of the skilled from countries of origin and goes on to examine the particular case of the migration of health professionals. Health workers are seen to be key to achieving basic welfare objectives in any country and their loss may be critical to countries of origin. Hence, the movement of health professionals may be central to any understanding of a brain drain. However, the case for a brain drain, even in this sector, is not straightforward. Specific country and place of origin of the skilled, place of training, appropriateness of training, fit of skills to needs, and the role of return and inmigration of health professionals all need to be taken into consideration. The article examines the case for a two‐tiered health training system, one for global markets and the other for local markets. Retention and return of the skilled are examined through the potential for outsourcing in both education and health care. The article concludes with an examination of policy approaches towards skilled migration and offers pointers towards a more balanced and integrated approach by placing the emphasis on development rather than control of migrants.     

THE NATURE OF OUTSOURCING RELATIONSHIPS: EVIDENCE FROM OAP PRICES

This paper studies the extent and variation in production cost pass‐through for U.S. outsourcing imports. Data from 4,676 products imported through the U.S. overseas assembly program show that outsourcing imports were characterized by incomplete pass‐through of production and trade costs to import prices. Notably, pass‐through was higher for products assembled in high education countries while the response of outsourcing import prices to competing suppliers' prices was largest for products sold by firms in capital‐intense industries. The reasons for these cross‐country and cross‐industry differences, as they relate to theories of outsourcing and trade, are explored. (JEL F1, F2)     

Transatlantic Roundtable on High–skilled Migration and Sending Countries Issues

Globalization and the advent of the knowledge economy have created a new context where there is a greater demand for the highly skilled, especially in the information technology (IT) industry. High–skilled migration has become increasingly more complex, even if in recent years the term "brain drain" has become a generic reference to "high–skilled migration" of all types. It has also become clear that brain mobility does not automatically translate into "brain drain", and that impacts vary by the types of skills held by migrants.
The meeting demonstrated that while much is known about high–skilled migration and its effects on source countries, there is also a great deal yet to be learned in a dynamic environment. Many participants deplored the lack of reliable data, which makes it difficult to know what is really going on and to establish appropriate policies. Clearly, there are an array of policies that can offset possible adverse effects of skilled mobility and even leverage the flow into positive outcomes for source countries. A key element is improvement of the population's general level of education. Low levels of skills keep average labour productivity and wages low and therefore retard development. Long–term strategies to promote economic growth are needed to enable developing countries to retain and draw back their highly skilled and address the negative effects of the brain drain. Migrants themselves can play an important role through their remittances, diaspora networks, and own willingness to return – at least temporarily — to share their skills and contribute to economic progress. Finally, destination countries can facilitate the process through policies that promote circulation of highly skilled migrants.     

A Closed Immigration Country: Revisiting Japan as a Negative Case

The Japanese government maintains that the country admits only skilled economic migrants. Its statistics tell a different story. Skilled and low‐skilled economic migrants are admitted in equal measure. The aim of this article is to explain the dissonance between the government's policy rhetoric and policy outcome by turning to policy output. To this end, I quantitatively analyse immigration admission channels for economic migrants, using Ruhs' Openness and Rights Indicators (2013). The main findings not only go against much of what we believe about Japan but helps us reach a more nuanced understanding of its immigration policies. I demonstrate that Japanese immigration admission policies have become more open towards de facto low‐skilled economic migrants over time and are more open to de facto low‐skilled economic migrants than to de jure skilled economic migrants. Instead of openness, the gains made by certain groups of de jure skilled economic migrants have been exclusive immigration privileges related to permanent residence and family sponsorship.     

Labour migration from South and South-East Asia: some policy issues

The rise in migration for employment since the mid-1970s has had serious consequences for many Asian countries. This discussion examines the issues raised by the migration abroad of thousands of skilled workers and the efforts that sending countries have made in recent years to bring the effects of labor migration more closely into line with their development objectives. It also considers several problem areas requiring the attention of policymakers and authorities responsible for the administration of overseas employment policies. It is estimated that between 1976-81 annual labor migrant flows from the 8 major sending countries in Asia increased sevenfold, from a mere 146,400 to over 1 million. The Asian migrant workers tend to be young, male, married (with dependents in the sending country), and better educated than the average home population. Most of them come from rural areas and are predominantly employed in construction and labor. The most distinctive feature of these workers is their concentration in a few blue collar occupations--carpenters, masons, electricians, plumbers, lorry drivers, mechanics, and heavy equipment operators. These production and trnasport workers outnumber the professional and technical workers by anywhere from 3 to 1 (Philippines) to 17 to 1 (Pakistan and Sri Lanka). At the aggregate level labor emigration affects the sending country's economy through its impact on the labor market, on the financial market, and on the market for goods and services. It can be argued that the outflow of a significant proportion of the labor force should lead directly to a rise in labor projectivity in the sending country since capital per worker among those left behind will increase, yet it can also be argued that since migration sifts out the most skilled and experienced workers there will be an erosion of the country's human captial resources. Specific measures have been adopted in most labor sending Asian countries to protect the welfare of migrant workers, to regulate conditions of employment abroad, to restrict the outflow of scarce skills, and to secure new overseas markets for nationals. Despite the efforts of governments to ensure that workers have satisfactory contracts on going abroad, many cases of "contract substitution" have been reported. The present attitude of many governments toward private recruiters seems to reflect both an acknowledgement of their effectiveness in finding job placements overseas and a growing concern to regulate their activities. The present trend seems to be to allow private agencies easier access while exercising greater supervision over those permitted to operate. The impact of labor migration on the labor markets of sending countries has not been uniformly damaging, but most of the countries have adopted 1 kind of policy or another to reduce the outflow of scarce skills. The use of material and other incentives for retaining workers in the country has obvious advantages but is not very widespread.     

LEARNING ABOUT EDUCATION

Limited human capital investment is a common characteristic of low‐income countries despite the fact that estimated returns to educational investment in low‐income countries are generally higher than those in high‐income countries. Empirical evidence suggests that income and credit constraints can only account for a part of this underinvestment. Recent experimental evidence shows that families' misperceptions about the returns to education play a role in their low‐investment levels. This paper builds a heterogeneous‐agent model of human capital and growth that incorporates an adaptive learning mechanism to capture the way agents form perceptions about returns to education. We find natural conditions guaranteeing existence of stable equilibria. Along transition paths, agents' misperceptions about returns to education depress realized returns, which serves to reenforce and perpetuate low human‐capital investment. If human capital investments have both private and public returns, we find multiple stable equilibria, including those which are characterized by low investment and low returns. (JEL D83, O10, I25)     

The Causes and Consequences of Albanian Emigration during Transition: Evidence from Micro Data1

This note reports the results of a field survey of individuals and firms in Albania, carried out during 1998. The surveys were designed to analyze the size, causes and consequences of emigration from Albania during the 1990s. Our results show that emigrants are motivated mainly by the ease of access of neighboring countries and by the prospect of high financial returns. Although most emigrants worked illegally and had part‐time, low‐skilled jobs, the majority found the overall experience positive, and the skills and earnings abroad have contributed to setting up businesses on return. These results have important policy implications for both EU countries and other transition countries in the region.     

The willingness to emigrate in six MENA countries: The role of post-revolutionary stress

This paper studies the determinants of emigration from six Middle East and North Africa (MENA) countries in light of the Arab Spring of 2011. The aim is to determine if the economically unfortunate events which occurred as a result of the Arab Spring, resulted in a brain drain for many countries. The paper's analysis is conducted using the Arab Transformation Project dataset of the year 2014 by employing an ordered probit model. The paper's main conclusion is that sentiments of unhappiness appear to be the primary determinant of the willingness to emigrate. Other post-revolutionary feelings include lack of trust and political and democratic discontent, which highly encourage the willingness to emigrate. In addition, socio-economic factors, such as being young, male, and highly educated, contribute to the willingness to emigrate. However, married individuals are less likely to consider emigration.     

Causes,Challenges and Prospects of Brain Drain: The Case of Eritrea

While there is little doubt that highly skilled workers in many Least Developed Countries (LDCs) are scarce, it is also true that many highly trained professionals have left LDCs to go and work in the developed world. The latter, known as the “brain drain,” or simply human capital flight, is not at all a new phenomenon; it has only become more pronounced in recent years. This paper delves into the causes, challenges, and prospects of the phenomenon of the “brain drain” in LDCs, by taking Eritrea as a case study. In so doing, it demonstrates that deteriorating economic conditions, lack of good governance and political instability are the root causes of the “brain drain” in LDCs such as Eritrea. The paper also highlights the impact of the “brain drain”, and suggests some of the measures that may be put in place by governments of LDCs in order to redress the situation.     

Violence,Networks, and International Migration from Colombia

Although Colombia is a major country of emigration, little is known about its citizens' motivations for migration. Social and economic conditions have been studied as determinants of migration, but violence has received less attention. We examine how social networks and violence function to promote emigration from Colombia by linking event‐history data from the Latin American Migration Project to external data on violence and economic conditions. We show that emigration is more likely to be initiated by those with higher education, those with network connections to migrants, and during periods of greater violence and increased police presence. Although violence acts powerfully to determine when people migrate, the geographic distribution of social capital determines where they go. Not surprisingly, migrants go to locations where people in their social networks are currently living or have been earlier.