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A blog about migration, remittances, and development

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This blog is hosted by Dilip Ratha, lead economist at the World Bank. Its goal is to leverage migration and remittances for development.  
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Knowledge and Skills

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

Submitted by Emily Farchy on Fri, 04/17/2009 - 09:28

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. 

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

Submitted by Sonia Plaza on Fri, 04/10/2009 - 09:44

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. Citizenship and Immigration Services (USCIS) put out a statement that “it has received approximately 42,000 H-1B petitions counting toward the Congressionally-mandated 65,000 cap.”

Indian information technology companies have been the largest petitioners of H-1B visas in the past, and now these firms are applying for fewer H1-B visas. For example, Infosys Technologies will apply for less than 3,000 visas as opposed to the 4,500 visas that it requested in 2008.
 
Even Microsoft Corp has applied for fewer H-1B Visas. Brad Smith, Microsoft’s General Counsel said, “I think we’re going to see substantially fewer H-1B applications filed this year compared to last year,” He also mentioned that “the majority of applications will be to extend the stays of existing workers rather than for new hires.”

A major use of H-1B visas has been to facilitate offshore outsourcing. Is the financial crisis having an impact on outsourcing activities? Has the U.S. fiscal stimulus package or the Troubled Asset Recovery Program complicated the hiring of foreign workers for companies receiving federal bailout funds? 

"Brain drain" and the global mobility of high-skilled talent

Submitted by Sonia Plaza on Thu, 01/29/2009 - 16:56

Since the 1960s, much of the literature on the development impact of migration has focused on ‘brain drain,’ the emigration of qualified professionals from developing countries and the subsequent loss of skills (which occurs faster than the replacement rate).

In the late 1990s, the literature shifted from brain drain to ‘brain gain,’ exploring the potential benefits of skilled migration arising from remittances, return migration, creation of trade and business networks, and the possible incentive effects of migration prospects on human capital formation at home.  You can see an extensive review of these issues here.

The questions related to the global mobility of high skilled workers can be grouped into two areas:

  1. Brain drain/gain, and the challenge of retaining and attracting high-skilled professionals such as doctors, scientists, and engineers; and
  2. The contribution of the diaspora in fostering the transfer of knowledge, technology, and finance, including remittances. ( link to http://www1.worldbank.org/prem/PREMNotes/premnote123.pdf)

A new report from the U.S. Census Bureau on Educational Attainment states that “a larger percentage of foreign-born than native-born residents had a master’s degree or higher in 2007.”  Their numbers lead me to ask:

  • What are the challenges for the U.S. in developing, finding, and retaining talent?
  • Will foreign students continue to choose the U.S.  as a place to study or will they prefer other countries?

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

Submitted by Sonia Plaza on Fri, 01/23/2009 - 10:37

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

2) Migrants will have to pay a levy towards schools, hospitals, and other local services so that that the new flows of UK immigrants do not put pressure on the community.

According to the UK Visa bureau, “the bill is part of the new Australian-style points –based system for immigrants introduced in stages last year, which aims to control UK immigration so that only those needed in the British economy move to the UK and no more.”

Australia may cut migrant visas as unemployment grows. In a recent interview, Australian Immigration Minister Chris Evans said that "the global financial crisis could lead to a smaller migrant intake in 2009, as demand for skilled migrants slowed."