Does ‘Brain Drain’ In Fact Lead To Brain Gain?

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As a followup to Matt Cameron’s great piece on misguided fear of brain drain, it’s worth checking out this late May Economist piece on the ways in which poor countries can in fact benefit from the alleged phenomenon:

Several economists reckon that the brain-drain hypothesis fails to account for the effects of remittances, for the beneficial effects of returning migrants, and for the possibility that being able to migrate to greener pastures induces people to get more education. Some argue that once these factors are taken into account, an exodus of highly skilled people could turn out to be a net benefit to the countries they leave. Recent studies of migration from countries as far apart as Ghana, Fiji, India and Romania have found support for this “brain gain” idea.

Of all these mechanisms, the remittances one is the clearest and easiest to measure and also the least interesting. But beyond remittances, in the realm of direct purchases, it’s also worth noting the importance of trade. When high-skill people emigrate to the United States they raise their own incomes and also raise the purchasing power of most Americans. And Americans, including working class ones, are pretty rich in the global scheme of things. If our purchasing power goes up, we buy more Chinese manufactured goods and Kenyan coffee beans. The benefits of a more economically efficient allocation of high-skill professionals are pretty broad.

The impact on motivation to work hard in school and acquire education is probably the most interesting thing the Economist surveys. But I’d also be interested in the way opener borders changes incentives for governments. Egypt isn’t just a country that happens to be poor. It’s been misgoverned, for decades, by a malign military dictatorship that extracts rents from the population. An exodus of the best people would reduce the elites’ ability to engage in parasitism, so the threat of such an exodus should have restrained poor governance.