A new World Bank publication shows remittances from migrants alleviate poverty and help raise levels of child health, school attendance and investment back home. However the report also shows some of the world's most vulnerable low income countries face a massive brain drain.October 25, 2005 — Eight out of ten Haitians and Jamaicans who have college degrees live outside their country.
And more than fifty percent of the university educated professionals from many countries in Central America and the Caribbean also live abroad.
They're just two of the findings of a new World Bank publication, entitled International Migration, Remittances and the Brain Drain. The volume is a product of the International Migration and Development Research Program of the Development Research Group, the Bank's research department.
"The report reveals the brain drain is massive in small and poor developing countries," says World Bank economist, Maurice Schiff, a co-editor of the volume.
"While over 50 percent of college graduates leave countries in Central America and the Caribbean, in some of them, the figure is as high as 80 percent."
L. Alan Winters, the director of the Bank's Development Research Group, says while the mobility of highly skilled workers can offer many benefits, the consequences of the brain drain could be serious for many developing countries.
And he says understanding the so-called brain drain remains one of the highest priorities for development research in the future.
The report's findings are based on the most comprehensive and rigorous database on the brain drain to date, created by researchers Frédéric Docquier and Abdeslam Marfouk, and presented in chapter five of the volume.
Larger Countries Less Brain Drain
Schiff says the report shows the extent of the drain brain problem in larger countries is much less.
"On average for countries with more than 30 million people, the brain drain is less than five percent of all college educated people. The reason is that they have a large population of skilled people, so that even with a large share of skilled people in the migrant population, their share in the skilled population is nevertheless small," he says.
Countries such as China and India only have about three to five percent of their graduates living broad. And it's a similar situation in Brazil, Indonesia and the former Soviet Union.
By contrast in Sub-Saharan Africa, skilled workers only make up four percent of the total workforce. But these workers comprise more than 40 percent of people leaving the country.
"Most of these college educated professionals from developing countries go to the United States, as well as the European Union, Australia and Canada. In fact Canada and Australia have the largest share of educated migrants out of the total number of migrants to those countries," Schiff says.
A Brain Waste?
With all the college graduates leaving their homelands, it raises the question as to whether their skills are being put to good use in the destination country.
Part of the volume looks at this issue, with co-editor and Bank economist Caglar Ozden finding that skilled migrants to the United States often fail to get jobs that match their education levels.
Overall, immigrants from Latin America and Eastern Europe with similar education levels are more likely to end up in unskilled jobs in the U.S. than immigrants from Asia, the Middle East and Sub-Saharan Africa.
Schiff says the data from the U.S. show educated migrants from India and the United Kingdom are more likely to get jobs in the US equal to their skill level.
"One of the main reasons is language. Both tertiary educated people from India and the United Kingdom speak English, and of course that's a big advantage when they come to the U.S. ," he says.
A Home Benefit
Regardless of the type of migrant - educated or not - the report clearly shows the money the migrants send back home does help alleviate poverty in their former home.
Close to 200 million people are living outside of their home countries, with remittances estimated to reach about US$225 billion in 2005, according to a forthcoming Bank publication, Global Economic Prospects 2006.
The World Bank's Chief Economist and Senior Vice President for Development Economics, François Bourguignon, says the household survey evidence presented in the volume demonstrates a direct link between migration and poverty reduction
A survey of Filipino households shows the remittances they receive mean less child labor, greater child schooling, more hours worked in self employment and a higher rate of people starting capital intensive enterprises.
In the Guatemala case study, remittances reduced the level and severity of poverty. The biggest impact was on the severity of poverty, with remittances making up more than half the income of the poorest ten percent of families.
The report shows the money migrants sent back to Guatemala was spent more in investments - such as education, health and housing, rather than on food and other goods.
An Exception in Rural Mexico
While the report shows the money migrants sent back home generally meant a greater investment in education, one exception noted in the report is the case of rural Mexico.
Studies in the report find that children aged 16 to 18 years in households from which someone had migrated had lower levels of schooling compared to households where no-one migrated overseas.
It's a finding that's been put down to the special situation of Mexico's rural migrants in the US labor market - the fact that their low level of education only gets them unskilled jobs in the US, whether or not they spend an additional year in school. So people from rural Mexico planning to migrate to the US have little incentive to invest in education.
The next phase of the research program will use existing information and generate additional data on a variety of issues in order to examine the effectiveness of a number of policies and programs. The objective is to derive policy recommendations based on solid evidence and analysis.