Impacts of Brain Drain

What does it mean for Asian, African, and Latin American countries that lose skilled professionals to developed countries? Traditionally, skills out migration has been seen as an unqualified negative for these countries; the very term brain drain suggests as much. Certainly the general tenor of current policy thinking is that skills migration produces a general 'brain strain' on development. While information technology (IT) migrants have spurred economic development in a few source countries through the knowledge they acquire, skills migration from other sectors – most notably health and education – has done considerable damage to countries' abilities to provide basic services.

Absence Effects

The 'absence' effects of brain drain are generally viewed as being very negative. Economically speaking, a country loses an emigration surplus, the difference between the value an emigrant was adding to the economy and that which the emigrant was being paid. This is a direct money measure of the economic loss of the emigrant's absence. Other potential effects include higher skill premiums that increase inequality through greater remuneration to people with increasingly scarce skills; fiscal losses through lost tax revenue; diminished scale economies; loss of role models and spillover knowledge from most skilled to lesser skilled individuals; loss of entrepreneurs; and weakened comparative advantage. Overall, human capital is lost which has implications for gross domestic product (GDP), entrepreneurialism, training the next generation, flows of foreign direct investment, provision of health and education services, and a country's capacity to build or strengthen critical domestic institutions, such as governments, schools, and hospitals. The absence of skilled personnel impacts every sector of the economy and society, and undermines the feasibility of meeting the Millennium Development Goals as the health, education, and private sectors, along with government, suffer from a lack of much needed skills and knowledge. With respect to skill sets lost, neoclassical theorists point out that those who remain behind can experience a loss of welfare if a loss of scarce skills causes externalities, such as poorer healthcare provision.

'Revisionist' approaches to skills migration take issue with the concept of the brain drain itself and suggest that skills migration should not be conceptualized according to winners and losers; the reality for many countries is a mix of positive and negative effects. Factors determining the country and sector specific impact of skills loss include the volume of cumulative loss, educational selectivity, the specific skill sets of emigrants, the timing of and permanency of migration, and the characteristics of the global economy.

Considered on its own, how much harm can absence do? Global data suggest that it largely depends on how many people leave (cumulative loss or CL) and what levels of education they have (educational selectivity or ES). One study found that CL was by far the greatest in North America at 15%, followed by Africa with 7%, Asia with 5%, and South America with 3%. The regional picture differs when ES is examined. The percentage of emigrants with tertiary education is largest for Africa at 75%, followed by South America at 48%, Asia and Pacific at 20%, and North America at 17%. So the proportions of highly educated people who have left are largest in the least developed parts of the world, which arguably have the most to lose from skills migration.