The departure of skilled workers in the developing world may, contrary to popular belief, do more good than harm. Photo:banoiff (flickr)

When educated professionals depart a developing nation, does greater wealth arrive? Some scholars in the international development community are saying farewell to the notion that the ‘brain drain’ hinders impoverished countries from expanding human capital and increasing the growth rate.

Exit brain drain. Enter brain gain.

The brain drain has long been perceived as a constraint on the progress of developing nations—much-needed doctors, professors, and scientists often abandon their homelands in exchange for better salaries and more comfortable lives in the developed world. However, research indicates that if countries can hit a sweet spot of sending around 20 percent of their talent to other countries, the residual impact of those individual losses will actually spur economic and educational growth at home.

But how? One way is through remittances, cash transfers from an individual in one country to another elsewhere. Take Ghana, for example. Some figures place remittance levels at $400 million per year, on par with the country's two biggest exports, cocoa and gold, which account for 25 percent of the foreign exchange earnings of the nation. To put this figure in perspective, in previous years Ghana has received around $650 million in foreign aid. Compared to other developing nations, that's low—in some, “remittances are more than double the amount of foreign aid,” as reported by Foreign Policy.

Furthermore, remittances can withstand the tests of natural disasters, and political and economic crises. Chances are an economic and political collapse in Egypt would deter foreign investment but encourage a migrant to increase his or her monetary givings to Egyptian relatives. Now those are derivatives Fannie and Freddie should have bet on.

Much of the new economic activity happening in African countries like Ghana are catalyzed by residents who have traveled or lived in developed countries. New York University professor William Easterly refers to this as “brain circulation,” that is, the movement of ideas and investments from educated professionals between their homes and the West.

Often, brain drainers will eventually return to their country of origin or maintain residency both abroad and at home. Not only do these individuals in turn support the economic development of their hometowns, but they also inspire members of the community to invest in education. According to Easterly, most students are motivated by the idea of living abroad, noting that “if this prospect is closed tightly, this may have an effect on the effort levels of students in the system, and therefore the quality of the graduates of the school system.”

Additionally, travel expands capital horizons. Robert Guest notes in Foreign Policy that “countries trade more with countries from which they have received immigrants.” A migrant living in the UK might inform his sister in Somalia that there is demand in his city for a specific talent she may have the skill sets to provide. Diaspora thus encourages a fluidity of ideas, innovations, and supplies and demands between often disconnected parts of the world.

Investing money abroad can be the best way to bring more of it home. Brainpower may work that way, too.

The Developing Worlds Educated face Tough Choices after Graduation. Photo: Farhad Zalmai for Mercy Corps

“Brain drain” has long bothered policymakers in poor countries says The Economist. But recent migration studies and a touch of classical economics suggest the better phrase is “brain gain."

A country that sends its most skilled workers abroad has three key advantages:

Remittances (money sent home from abroad) go up. In 2010, workers remitted $325 billion, equaling the GDP of Switzerland, largely from developed to developing countries. According to The Economist, skilled workers often find better job opportunities abroad in richer countries, multiplying their income several fold and creating the potential for additional remittances.

Émigrés return with more marketable skills. Increasing numbers of skilled migrants eventually return home with new skills, new contacts, and a pot of savings to invest after several years abroad. In one Romanian study, returning migrants earned 12 to 14 percent more than similar people who stayed home.

There is a higher incentive for education and skill development. Research from Fiji and the Cape Verde Islands show that the general level of education in a population often rises when workers see potential for immigration to “greener pastures”. People have an increased incentive to pick up skills which remain useful if they decide not to migrate after all.

Of course, emigrating tends to benefit the migrants themselves. Otherwise, they would be less likely to leave home.

"Brain gain" parallels English political economist David Ricardo’s law of “comparative advantage” -- stating that two countries with advantages in different areas are better off trading. Richer countries offer more quality employment opportunities for skilled labor while, according to two North African studies, skilled laborers remaining in developing countries often face underemployment or unemployment. Migration across borders -- swapping workers for revenue -- balances these two forces. Some studies claim the world would add $39 trillion to global growth over 25 years if labor became truly mobile.

A skilled immigrant moving from the developing to developed world could actually benefit both nations:

• The destination-country adds a skilled worker, boosting output.
• The worker's annual income rises -- say, from $10,000 (at home) to $50,000 (abroad).
• If the worker remits only 25 percent of his or her income, then losing that worker abroad actually raised the individuals contribution to GDP from $10,000 to $12,500.

Migration does create winners and losers says The Economist. The emotional toll on families continually forced to relocate can be high, though lessening with new technology. And some skilled workers (educated and trained at the expense of cash-strapped governments) do not return much to their poorer homelands.

However, the benefits of brain gain are increasingly thought of as outweighing the costs of brain drain. The Economist aptly sums it up: "Letting educated people go where they want, looks like the brainy option."

Educated citizens of developing countries often move abroad to find higher paying jobs. Photo: Jakko (flickr)

“Brain drain” sounds like a pretty scary thing, right? It’s the term often used to describe what happens to developing countries when their best and brightest citizens leave to find work abroad. But does it always have to be a bad thing? NPR’s Planet Money blog profiles a new study that suggests that emigration can have many benefits, especially for the migrants themselves.

For the study, economists John Gibson and David McKenzie tracked the top high school students from five countries over a period of 28 years. The countries — Ghana, Tonga, Papua New Guinea, Micronesia, and New Zealand — all have an especially high reputation for producing skilled emigrants. Gibson and McKenzie asked these people about their migration patterns and current ties to their homelands and concluded that it makes financial sense for talented citizens to leave developing countries to work abroad.

“The best and brightest stand to earn $40,000-$70,000 more per year by working abroad – which is at least two to three times as much as the developing country individuals would earn at home. Even accounting for differences in costs of living, this is a huge gain and benefit of migration for these individuals.”

Furthermore, migrants send an average of $5,000 a year back to their home countries. That may not seem like a lot when compared to New Zealand’s 2009 per capita income of $27,400, but consider that Papua New Guinea’s was $2,300 and Ghana’s was $1,500 (figures from the CIA World Factbook). That additional money gives developing economies a welcome boost.

Instead of worrying about brain drain, Gibson and McKenzie suggest that developing countries should "focus instead on the basics of providing the policy environment needed to foster growth and innovation at home." But until then, talented citizens from developing countries will probably continue to look for economic opportunities far from home.

The World Health Organization has issued a warning for yet another dire consequence of the global economic crisis: the “severe medical workforce crisis” in Africa and Asia, is expected to get worse.

The most recent World Health Report from 2006 estimates that Africa and Asia lack more than 4 million health workers combined. The WHO-sponsored Global Health Work Alliance estimates that 1 in 4 doctors and 1 in 20 nurses will leave Africa to pursue higher-paying jobs abroad.

The repercussions for health worker brain drain are severe, especially in rural communities where access to medical care is limited. In Ghana there is only one doctor per 17,700 citizens — the majority of whom practice in the country's two largest cities. The UN news agency reports that in Ghana the scarcity of doctors and the high cost of medical care are driving some pregnant women to turn to prayer camps, trying to use prayer to get through labor pains.

In an interesting twist, the economic downturn in Europe and the U.S. has driven many well-educated migrants to leave troubled financial hubs like London and New York City and return to their respective home countries in Africa and Asia — a phenomenon some are calling reverse brain drain. As reported in World Focus' online radio show, “Though the U.S. has often been called the "land of opportunity," the country is losing some of its top minds to companies overseas.“

It hasn't hit the health sector yet, but reverse brain drain could help ease the heath-worker crisis. Perhaps a financial recession for some could prove to be a time to regain talent for others.

Photo: James Gordon (flickr)

In a country where kidnapping and violence towards medical workers occurs all too frequently, the Iraqi government is taking measures to stop doctors and nurses from leaving the country and convince those who have left to come back.

On Monday, Iraq announced a number of new policies aimed at creating a safer environment for medical professionals to work. Police will not be able to detain doctors without Ministry of Health permission, doctors will be permitted to carry guns, and security will be strengthened at clinics and hospitals. Iraq is also attempting to bring refugee medical workers back home through advertising campaigns and improved salaries.

According to a March 2008 report by the International Committee of the Red Cross,
the health care system in Iraq is in crisis.

More than 2,200 doctors and nurses have been killed and more than 250 kidnapped since 2003. Of the 34,000 registered doctors in 1990, at least 20,000 have left the country."

The lack of a strong health care workforce in Iraq has serious consequences. According to a report by Medact, studies have shown that the conflict in Iraq has caused a dramatic increase in death rates of children under 5, emergency aid needs, and war-related morbidity and mortality. In addition, basic health and primary care services are both hard to find and unaffordable, causing many people to either turn to underqualified practitioners or go without care.

This is not the first attempt by the Iraqi government to lure back skilled professionals: In 2005, the government announced it would double the salaries of university professors to prevent "brain drain." We'll have to see if these latest measures will be enough to improve a dangerous situation.