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Brain drain, brain gain or brain same? The effect of European accession on human capital formation

With remittances expected to fall in 2009 as the financial crisis unfolds, the primary mechanism through which origin countries recoup the efficiency increases achieved by skilled migration will dissipate.  But is there another mechanism, less direct but with long-term implications, through which migrants can benefit their home country.

The notion of the brain drain from developing to developed countries is not new. What is relatively new in the ’new brain drain’ or ’brain gain’ literature is its positive prognosis regarding the economic implications of labor market liberalization.  Yes there is a brain drain and on the whole it is bad for development.  But the migration of skilled workers need not be a zero sum game.  That is, the gain of the host country need not inevitably translate to the loss of the sending country. 

United States allows travel and remittances back home by Cuban immigrants

Sanket Mohapatra's picture

The Miami Herald reported today that the Obama administration has lifted restrictions on family visits and sending of remittances by Cuban immigrants living in the United States (more details from a White House fact sheet).  Although there are no official figures on the amount of remittances sent by the 1 million Cuban immigrants in the U.S., according to a State Department background note on Cuba, these flows are estimated to be between $600 million and $1 billion annually.  The earlier U.S. policy, in effect since 2004, allowed very small amounts of remittances to immediate family members and trips back home every three years.   

Interestingly, the Cuban government still levies a tax of some 20 percent on inward remittances, and a White House spokesman and some senators have called on Cuba to reduce these onerous charges. These charges represent a significant loss of value for the recipients and a barrier to sending remittances through official channels.

Crisis and Immigration: Is demand for migrant workers falling in the US?

Sonia Plaza's picture

This is the first year that the H-1B visa cap has not been reached during the first 5 days of filing applications. The current cap is set at 65,000, with an additional 20,000 for holders of advanced degrees. It seems that the number of petitions for the H-1B visa this year will be far less than last year. The U.S.

Consumption smoothing via migration and remittances

Dilip Ratha's picture

Atlanta Fed Research Economist Federico Mandelman and Andrei Zlate, a PhD candidate in economics at Boston College, have prepared a paper analyzing the role that of migration and remittances during the business cycle. The data they present indicate that when the U.S. economy has outperformed Mexico’s, there were usually more attempted illegal crossings into the United States.

The financial crisis and immigration policy: how some developed countries are coping

Sonia Plaza's picture

More restrictive immigration policies by developed country governments are being implemented as the financial crisis deepens. For example, the United Kingdom just published a bill which contains some of the following measures:

1) Migrants who are not citizens or permanent residents of the UK will not have access to full services benefits and social housing; and

International Migrants Day: How are international migrants perceived in destination countries?

Neil Ruiz's picture

Today marks the celebration of the unquestionable contribution and sacrifices that many international migrants make to both destination and origin countries.  Migrants work hard, fill jobs that are needed, and send a large portion of their earnings to support their families at home.  Despite all of their contributions, native populations’ opinion and the policies developed by their governments continue to be mixed. 

Public-Private Partnership Reduces Remittance Fees

Tomas Martin Ernst's picture

Pacific Islanders have long faced limited choices and exorbitant fees when transferring money to families and friends. Following numerous focus groups and two high-level public-private stakeholder dialogues convened by the World Bank in Sydney, an inter-governmental body was established in Wellington to address the high costs of remittances in the Pacific. It was tasked with identifying public policy solutions and coordinating actions with New Zealand's financial industry.


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