How does emigration affect countries-of-origin? Paul Collier kicks off a debate on migration

March 18, 2014

     By Duncan Green     

Take a seat people, you’re in for a treat. Paul Collier kicks off an exchange with Justin Sandefur on that hottest of hot topics, migration. I’ve asked them to focus on the impact on poor countries, as most of the press debate concentrates on the impact in the North. Justin replies tomorrow and (if I can work the new software) you will then get to vote. Enjoy.

How does emigration affect the people left behind in poor countries? That many countries still provide little hope of even basic Paul Collierprosperity to their citizens is the great global challenge of our century. It is a vital matter that the poorest countries catch up with the rich world, but it will require decades of sustained high growth. To see how emigration might affect this process of convergence we need some understanding of why poor countries have remained poor. Poverty persists in very poor countries because of weak political institutions, dysfunctional social attitudes, and a lack of skills. These all make it difficult to harness economic opportunities. Emigration can either help or hinder convergence depending upon who leaves, how many leave, and for how long they go.

Potentially the most important effect of emigration is on political institutions and social attitudes. There is now solid evidence that emigrants can be influential in their home societies. Students from poor countries who have studied abroad in democracies and then return home bring with them pro-democracy attitudes. They spread these attitudes and are sufficiently influential that they speed up democratization. An astonishingly high proportion of the political leaders of poor countries have studied and worked abroad, and this equips them with both new skills and new attitudes. Even migrants who do not return have some influence with their relatives back home. During elections they give advice and commentary, and they become role models for smaller family size.

There has been a lot of research on whether emigration causes a brain drain or a ‘brain gain’. Intuitively, if educated people leave there can only be a brain drain. But we now know that this may be offset by an enhanced incentive to get education. If education is the prerequisite for getting to America, then the many youths who dream of going there will try harder at school. While some will achieve their dream, many will not but in the process will have acquired more education than otherwise. It turns out that which of these effects predominates depends upon how many educated people emigrate. In big countries that are already converging, such as China, relatively few educated people emigrate and so the brain gain predominates: China gains from emigration. But in small countries that are falling even further behind, such as Haiti, so many of the educated leave that the brain drain predominates. Many small, poor countries are unfortunately in the same position as Haiti.

Collier Exodus coverThe brain drain can potentially be reinforced by a motivation drain. Many poor societies are beset by opportunism: teachers don’t show up for work, nurses steal drugs, policemen extract bribes. Those who are motivated to do their jobs properly can stick out as an uncomfortable minority. Emigrating to societies in which norms are more functional can be an attractive option for such workers, but cumulatively this is self-reinforcing: the more who leave the less attractive it is to stay. Whereas the brain drain is well-understood, the motivation drain has yet to be quantified but its analytic foundations have been set out by Nobel Laureate George Akerlof.

Finally, emigrants send remittances home. While this is helpful for the relatives left behind, the average remittance is only around $1,000 per year. Workers would usually produce more than this if they were to stay home, so there is often a net loss to the economy.

In trying to weigh up these disparate effects it is clear that having some emigration is better for poor countries than having none. But this is a clear answer to the wrong question. The pertinent issue is whether poor countries would be better off with somewhat faster, or somewhat slower emigration than they have currently. The answer depends upon who is migrating: young people in search of an education, unskilled workers in search of a job, or skilled workers looking to use their talents. The evidence suggests that the more students the better, especially if they then return. Unskilled workers may well send back more in remittances than they would make at home. But the emigration of skilled workers may already be excessive. Recent evidence finds that for many of the poorest countries emigration rates are already beyond the point of peak benefit: these countries are haemorrhaging their scarce talents. The most severe effects are for fragile states emerging from conflict. During conflict they haemorrhage their most capable people. Post-conflict, they desperately need them to return but cannot compete with the lifestyles of the rich world. Emigrants considering return face a coordination problem: return would be less alarming were others to return as well but there is currently no mechanism for facilitating coordinated return.

Skilled and motivated people are the fairy godmothers in any society: they benefit ordinary people. As the fairy godmothers increasingly shift from poor societies to rich ones, they themselves benefit, but I question whether we should regard this as a triumph of social justice.

Paul Collier’s book Exodus was published by Oxford University Press and Penguin in September 2013.

March 18, 2014
Duncan Green