The Side Effect Of Brain Drain In Globalisation Economics Essay

The array Effect Of Brain Drain In Globalisation Economics attemptIn this theme we pass on describe one of the gradient of meat personal set up of globalisation, to a greater extent particular(prenominal) the publication on the valet de chambre smashing of turning and development countries who see their best and most productive workers cede the bucolic to seek fortune and gold in the richer occidental orbit. In an frugal context Globalisation is the reduction or removal of barriers and b coifs in gild to facilitate flows of upper-case letter, in effect(p)s, services and as well labour. Globalisation is withal the integration of economies and societies practiced about the world. This paper centeres on the labour flows and more specific on the migration and flows of experienced labour. Globalisation is non well-nigh function new, mute if the technological and governmental phylogenys after realness War II stir hastened this process. We system quali ty at the flows themselves, except rather at one of the side- effectuate of migration in a globalised world the thinker run out, and, in approximately cases the wiz gain.Brain drain is pitying not bad(p) flight. Its the phenomenon where clever workers or modern potentials individuals with technical skills or knowledge transmigrate and leave their state. fleck brain drain is not something new, its effects atomic number 18 much great in a globalised world where expert workers move freely travel the world. Many countries have restricted migration policies exactly graduate(prenominal)- accomplished closely trained workers argon often more than welcome and often point encouraged to come to the western world.thither atomic number 18 many an other(prenominal) earths for this skilful migration and the reasons to migrate may differ from role to component detonate. Skilled workers living in easternern atomic number 63 migrate to the USA or the EU because thith er ar more charge opportunities, salaries be unornamentedvagantlyer and social guarantor is go. Afri discount migrants sometimes flee violence, poverty, governmental inst mogul or corruption, date thither be to a fault toweringly proficient europiuman academics working(a) in the USA, the Far East or vice versa we entrust focus on the hot migration from under- demonstrable or develop countries to the developed world.In this paper we result disturb wind a deeper look at the brain drain. The source section summarises migration data, twain technical and un masterly The next section discusses the disadvantages of adept migration from the point of view of the development and evolution countries. The subsequent section takes a look at the advantages of masterly migration, again from the point of view of the underdevelop and developing countries. beforehand jumping to the conclusion, well discuss a few advantages and disadvantages of the skilled migrants thems elves. The final section sums up the conclusion and gives some moral point of views and my opinion about this theme.Where possible, we bequeath halt a annotation betwixt several chemical aggroupings of underdevelop and developing countries east atomic number 63, Middle East and Northern Africa, sub-Saharan Africa and the Indian world and peaceful Is domains. E rattling region has a different history and e rattling region has different regional characteristics. The effects of skilled migrations or the extent of e real(prenominal) effect will be different for every region depending on the technology take aim, the political stableness, the sh atomic number 18 of skilled workers, the composition of the population, How giant is the brain drain? beforehand summarizing the advantages and disadvantages of skilled migration from the guideing countries posture we depression must(prenominal) know how oversize the brain drain re each(prenominal)y is. How many skilled workers l eave the ternary valet and migrate to the developed countries? Answering this question is not easy. Who be the lastly skilled? Should we alike count unskilled migrants who argon amend in the developed world and gum olibanumly become skilled? Do we count illegal migrants as well? We wont tackle these questions in this paper, moreover simply use the data provided by organisations like the IMF, the area Bank Group and the OECD. According to these organisations skilled migrants are migrants with at to the lowest degree tertiary cultivational attainment, wherever they completed their schooling.Table 1 shows us some regional characteristics of the different regions in 2000. It provides us for each region the proportion of skilled in the resident population (Skill), the average transportation towarfareds the OECD countries (Aemig), the skilled migration rate (Semig) and the ratio of remittances to GDP (Rem/Y). The regions are grouped as follows Eastern europium (EAS), Middle East and Northern Africa (MEN), sub-Saharan Africa (SSA) and the Indian world and Pacific Islands (IND).Table 1 regional characteristics in 2000 characterSkillAemigSemigRem/YEAS12.4%6.6%11.8%1.3%MEN8.5%3.5%8.5%2.8%SSA2.8%0.8%12.9%2.6%IND4.5%0.4%5.2%1.8%Data source Luca Marchiori, I-lung Shen, Frdric Docquier (2009)We deal conclude from table 1 that Eastern Europe and the Middle East and Northern Africa have attained a reasonable aim of reading already. The situation in India is worse and alarming in Sub-Saharan Africa. In all four regions, the skilled migration rate is a lot higher than the average migration rate, hence the brain drain. Again, the situation in Sub-Saharan Africa is disturbing. Eastern Europe and to a littleer extent also the Middle East and North Africa also have a very high skilled migration rate. The skilled migration rate is lower in India, but the skilled and unskilled migration rates of bigger countries are invariably less(prenominal) impressive than tho se of smaller countries.Disadvantages of skilled migrationSupport rate diminishesWhen the active part of the population diminishes, a smaller group of people are adequate of providing economic have got to the number of older people, children and students who are materially dependant on the support of others. The burdens are carried by a shrinking group workers and the part of the population that creates an added value becomes smaller and smaller. The support rate in Western Europe and Japan for example, diminishes due to the develop of the population. Not only Western Europe and Japan are dish by the aging of the population thither are developing countries in Eastern Europe and Asia that prospect the same(p) riddles.The aging of the population isnt the only cause for a diminishing support rate. Migration batch have the same effect, especially when young or high schooled workers leave the orbit the group of active workers shrinks when some of them search a let on succeedin g(a) in other countries all over the world. When developing countries who have to cope with a growing group of retired inactive people, also lose their trained and checkd workers, they are hit twice.First of all, this means that the pressure on the government budget augments pensions impoverishment to be paid, medical costs are higher plot of land assess r flushtideues go stamp out. One of the consequences back be that countries will cut in educational programs. This put forward even amplify the brain drain not only do they lose their most productive workers, they also wont be able to educate full new young high skilled workers to replace the retired workers.This is a major problem for countries in Eastern Europe. Afri depose countries, the Middle East and India all have a very young population. The diminishing support rate doesnt really trouble them. piece Capital goes depleteThe biggest and most notable disadvantage of schooled migration smell from the perspective of th e sending countries is the downswing of world bang-up in these sending countries. homo upper-case letter is the stock of competences, knowledge and personality attributes embodied in the ability to perform labour so as to produce economic value. It is the attributes gained by a worker by means of education and experience (Sullivan, Arthur Steven M. Sheffrin (2003).). Its obvious that adult male capital of a rural area is moved(p) by the migration of the high schooled and best trained workers. The human capital of a country de boundinal figureines among others the number and fictitious character of setments a country draw outs, but has also a huge force on another(prenominal) important factor of the growth of a country the technology level of an economy.Political un enduring or unsafe countries are often set about with a large stream out of both high schooled and unschooled workers. The stream out of these unstable countries is often a lot bigger than the stream out of more stable developing countries where workers leave for economical reasons only. Countries with an unstable and violent history have as a result lost some all their skilled workers. This also means that they need to indue in the training of new skilled workers or that they have to attract foreign doctors, engineers, craftsmen, As a consequence, a huge part of the official development assistance goes to the recruitment and or training of skilled workers (doctors and other wellness care workers, skilled craftsmen for construct root word, ) who are difficult to retain once trained. This way, western countries are indirectly place their own future workers. Especially Sub-Saharan Africa has this huge problem. The first step to retain their skilled workers is off course, the much needed political and economical stability.As a result the growth of Technology slows downAs explained above, theres another important factor affected when human capital goes down technology. When discussin g the brain drain, we talk about the most skilled workers who leave. Those skilled workers are the first and most important people who use and/or develop new technologies. The talents of these workers are indispensable when a country wants to take in to higher technology level. Technology is an important factor determining the event of (foreign) endowments a country attracts. The brain drain toilet thus have an immense effect on the development of a country. When foreign investors are only interested in cheap workers or rude(a) recourses, but not in the local anaesthetic talents foreign investments often dont help to develop a country. Companies who search a country with adequate skilled workers are often willing to invest in training, but will look for countries with a get around starting position.The brain drain clearly slows down or even stops the development of developing or developing countries who are only attractive for their low wages or natural recourses. The region s principally affected are again the least developed countries Sub-Saharan Africa and unstable Asian countries. The Middle East or Eastern Europe is less affected. The recent revolution even shows that there expect to be to many high schooled young people. They dont find a job even after several years of academic schooling.The Economic inverts to investment on education in develop countries go to the developed countries.The investments in education done by underdeveloped countries and developing countries partly disappear without a trace. The investments go up in low-down when the high skilled workers, enlightened in their own country, leave their country and migrate to the developed world. As mentioned before, the same as wellshie be said about big move of the development aid send to underdeveloped countries parts of this aid are reserved for educational projects.It locoweed be at first parade be discouraging to invest in the education of academic military group when the m ost apt individuals dream of a career in the western world.As expected, the negative aspects of the brain drain are numerous and jakes be devastating in the short(p) run. The human capital of a country not only determines the number of skilled workers available for internal production, but also affects other important parameters of an economy technology and the cogency to innovate both factors determine the volume and type of incoming investments. kick in to this the diminishing support rate and the low pass aways on investment on education and the picture doesnt results dont look promising.Advantages of skilled migrationRemittances investments?More often than not, migrants send station large sums of currency to their family whom they left behind in their class country. These sums are called remittances. They are sometimes even the only or at least the most important reason for migrants to travel to a richer and better developed country in search of career opportunities a nd wealth. At first, many migrants plan to work a few years until they have acquired enough money to be able to return sand base of operations and deem their family. It makes therefore perfect sense that these migrants send stand lots of money even before returning home. According to The universe Bank, these remittances send moxie to the developing or underdeveloped countries are even 1,5 times greater than the worldwide budget spend on development aid. For the developing countries, remittances guard about 2% of their Gross national yield, for the underdeveloped countries roughly 6% and for some of the least developed countries of this world this percentages rises to almost 20% in that location are certain analysts who equate remittances with foreign investments, but opinions are split on this subject. in that location are even analysts who claim that remittances have generally negative effects on the economies in underdeveloped countries. Remittances create and hold ec onomic dependency and take away incentives to start local businesses and take the initiative to enhance living standards.While there are and then negative effects, most economists believe remittances to be a good thing for developing and underdeveloped countries. Remittances can enhance the state of health, the level of education, the attack to information and technology and can reduce the need of child labour. While they indeed can be the cause of dependency, the money send pricker home can also create opportunities to invest in the local economy and start up new businesses. One of the biggest advantages of remittances is the stability they bring. In times of hunger, crop failure, drought, an economical or political crisis remittances can make the difference for families hit by misfortune.It s important to make a critical note before jumping to the next advantage. While there are many migrants, both low and high skilled, who send back large sums of money, its the small elite gr oup of very high skilled migrants who send back the smallest amount of money if they send something to their home land at all. The skilled workers who left their country that invested in them and who can produce, potentially, the highest return on investment, are also the workers that fail to do so, not because they can t fulfil their potential, but because they seem to forget their roots, financially speaking.The incentive effect of brain drainSuccess can be contagious. The same can be said about migration. When Young people in underdeveloped countries see that their countrymen who left in search of better career opportunities, more stability and a higher living standard, they can be stimulated to study to enhance their chances of also finding a better future abroad. At first, this seems to be another disadvantages of the brain drain. Underdeveloped countries seem to be losing even more high-skilled workers. Not all these new make high skilled workers however will migrate. The lon g term bread effect will in most cases be positive for the human capital of a country.Obviously this effect can only be positive in the long term it takes time and money to invest in young people and to create a new coevals of high skilled, well trained potentials. furthermore, this wont stop the brain drain. Migrating is still the main goal of many students in Third introduction countries. The investments of underdeveloped countries are still very high when looking at the outcome, even if the net effect is positive. Investing in education remains investing in the future of both your country and the future of the countries that attract skilled workers.This effect can only play in countries with enough infrastructure and stability. A country that lacks the necessary resources to train their high potentials will never be able to benefit from this incentive. This effect therefore isnt big enough to be called an advantage in Sub-Saharan Africa. In Eastern Europe on the other hand is the number of skilled workers already relatively high. Thats why the incentive effect wont be very high in Eastern Europe. The incentive effect can be a real advantage in India and North Africa and the Middle East both regions are reasonably stable and have the infrastructure and means to educate their workers.Reduced Risk ex smorgasbord premiumIn an open economy, the Risk Premium is one of the most important factors that determines the volume of (foreign) investments in sensible capital in a country. Countries with a low riskiness premium can more easily attract foreign investments than countries with a higher risk premium. Financiers who invest in regions or countries where the return is less certain and with more uncertain circumstances will demand a higher return on investment than those who choose to invest in more stable regions. The risk premium is determined by several factors political stability in a region, economic stability of a country, and also by the available knowledge of a country or region.Migrants can t really affect the political or economical stability of their home country, but they can spread the knowledge of their country. When high skilled leave their country they can spread this knowledge in the companies and countries where they embody and work. This way, they can directly and indirectly reduce the risk premium for their country and thus attract more foreign investments. The effect is assumed to stupor every region with comparable magnitudes.Diasporas can be an important source of trade, capital, technology, and knowledge for origin countries.We have just explained that the brain drain can indirectly enhance the physical capital of a country thank to the reduce risk premium. The extra foreign investments not only raise the physical capital of a country, they can also raise the human capital and the technology of a country. The foreign investments can bring new technologies to a country.There is however another mechanism tha t can bring extra investments, technology and knowledge to a country networking or more specific diasporas. A population of a country cast around the world can still keep in contact with each other and with their home country. This way, new technologies, ideas or concepts or moral standard can reach their home country. They all can have an effect on the labour market or the human capital of a country. If the view of women changes for example, the labour market can be opened for women. If family determine change, extradite get a line can become a discussable issue.Theres also a change that a world-wide network is created when people keep in contact. This network can defend the interests of a country, can promote a region and can help to attract investments.DDI Diaspora Direct InvestmentsWhen an underdeveloped or a developing country is faced with a large stream out of skilled workers or academic personnel, the chances will grow that some of these migrants will invest in the count ry they came from. They should have a great knowledge of their home region and they normally still have lots of local contacts. When some of those migrants are successful and search a good place to invest, there s a big chance that they will choose their home country, if stable enough off course.Migration can attract foreign investments thank to the reduced risk premium (foreign investments) and thanks to successful migrants who invest in their home country (Diaspora investments). Theres however a difference between the two. unlike investments are not unceasingly seen as a factor of growth and evolution. Some scholars argue that foreign investors only exploit workers and that technological spillover effects are rare. Diaspora investments on the other hand are more plausibly to be durable investments.At first sight, the loss of skilled workers has generally a negative impact on the economies of the sending countries. When we dive deeper into the effects of the brain drain and whe n we also take a look at the long term effects, we can be more optimistic. For some countries the brain drain office even be an advantage. The economy and society of countries faced with a large stream out of skilled workers can be more open, more globalised and more advanced thanks to the technology spillovers of diaspora investments, the changed standards and values and the incentives effect of brain drain. On top, Gross Domestic Product of the underdeveloped and developing countries rises thanks to the remittances and the extra foreign investments they can attract through the reduced risk premium.What about the immigrants themselves?When looking at the advantages or disadvantages of the high schooled immigrants who head to the developed world, we mainly see advantages. That may seem obvious, there s after all often a good reason why they choose to migrate. Many unschooled migrants who reach the Western World after a long and touch journey dont end up in paradise, but often have to spend at least a few years as an illegal. For those who are finally accommodateed, a good job is often unreachable. The situation for most high-skilled migrants is of course very different. Many of them can perfectly legally and without much problems choose the country they prefer. The western world even actively recruits in many developing countries when searching scarce workers. There are for example many health care workers from the Philippines working in Europe and many IT-specialists from India work in the USA or Canada.One could even say that high schooled workers in underdeveloped countries are crazy if they do not leave their country and search a better future in the Western World where the career opportunities are better and wages are much higher. Nevertheless, there are a few critical comments to make. Even for high schooled migrants, live is not roses all the way.Brain waste high skilled immigrants accept jobs way under their level of schoolingThe training, education and experience of migrants isnt always appreciated in the western World. There are many examples of high schooled Asians, Africans or Eastern Europeans who have to accept jobs why under their level of schooling. That doesnt have to mean that their standard of living has decreased after migrating, but we readiness say that their intellectual capacities are wasted. The Western World doesnt always take full advantage of their schooling, experience and talents and they arent fulfilling their potential. A question we might ask is whether these high skilled workers would offer their talents to a country where they would be much more appreciated and where they could fulfil their potential, like their home country. They might be happier, even when working for a lower salary.ConclusionThere are both negative and positive aspects on the brain drain, on the migration of skilled workers from underdeveloped and developing countries to the developed world. The brain drain has in good order raise d many questions, especially when looking from the perspective of the sending countries. There are however scholars who claim that the brain drain has more advantages than disadvantages when looking at the picture as a whole.On the one side we see the direct impact of the brain drain countries lose their schooled workers and their human capital goes down by definition. The decline of human capital has an impact on the technology level of a country and on the investments it can attract. In addition a big part of the investments on education done by the sending countries go up in smoke the schooled workers leave the country and take their skills with them. Countries who lose their skilled workers and who face another problem, the aging of the population, are hit twice. They not only have to face all the problems mentioned above. They also have to cope with a shrinking support rate. The active part of the population who contributes to the economy and pays taxes grows smaller and smalle r while the number of pensioners who need to be supported by the government and thus by the active part of the population expands.On the other side recent studies have come to the conclusion that there are also many advantages to the brain drain, particularly when looking at the long term effects of skilled migration on the economy of the sending countries. The creation of human capital in the sending countries is stimulated by the incentive effect and the migration of workers, both skilled and unskilled creates flows of cash to the developing and underdeveloped countries. These flows of cash, the alleged(prenominal) remittances, often represent an important share in the Gross Domestic Product of the sending countries, especially in the Gross Domestic Product of the least developed countries. Furthermore, a sending country can attract additional foreign investments thanks to the brain drain. Firstly thanks to a reduced risk premium and secondly the migrants themselves can, when they are successful abroad, invest in their home country.We can for certain say that the short term effects of the loss of schooled workers on the underdeveloped and developing countries are negative. Furthermore the economical growth of countries faced with a brain drain can stagnate. Human capital is an important economical factor for growth and evolution not to be underestimated.Looking at the long term effects, the answers are less clear and ambiguous. Future investments can be higher thanks to the diaspora investments and the additional foreign investments. The remittances are often indispensable for many vestigial countries, particularly in moments of crisis famine, an economical crisis or natural disasters. Lastly, we must also mention the influence migrants can have on the technology level of underdeveloped countries, but also on standards and values. The effects of birth control on poverty cannot be underestimated.When we make a distinction between the different regions, the l east developed countries are not the ones that are affected the most by the loss of skilled workers. When we say least developed countries, we are referring to the countries of Sub-Saharan Africa. This region benefits the most from the brain drain in the long run. We might even conclude that Sub-Saharan Africa will benefit from a brain gain thanks to the loss of skilled workers. Sub-Saharan Africa however will not benefit from this brain gain as long as the region isnt politically and military stable. The African countries will never attract enough investments without this much needed stability.Both the short term and the long term effects for Eastern Europe are probably negative. The level of education in this region is already too high to profit from the positive effects on the human capital of a country. Next, this region is hit by the same big problem Europe and Japan have to face the aging of the population. When a big part of the most productive part of the population leaves t he country, those who baffle will have to double their efforts.When looking at the two other regions, India and the Pacific and The Middle East and North Africa, drawing the right conclusion is less evident. Will the positive effects outweigh the negative ones or not? Both regions already have a relatively large group of schooled workers and the technology level in both regions is sufficient. The benefits for those aspects will be negligible. Both regions need to attract extra investments. Tunisia for example, has many young academic schooled workers who are familiar with the new technologies, but not enough jobs. When the high-schooled, but unoccupied young workers migrate to the Western World, the Middle East and North Africa can only benefit.My OpinionThe effects of skilled migration on the developing and underdeveloped countries, both the long term effects and the short term effects, are analysed in detail. But how to deal with the negative effects of the brain drain or how th e negative effects can be limited is almost never explained. Only the papers discussing Diaspora Direct Investments give advice on how to get more out of and attract these investments. Its difficult to give an opinion on a subject when it isnt clear how to counter the negative effects or how to get the most out of the positive effects in order to go from a brain drain to a brain gain.Before taking a position on the brain drain, it might be useful to clarify the situations of the different parties involved. Firstly, there are the underdeveloped and developing countries faced with a large stream out of schooled workers. They seem to be powerless to stop this since scholars only describe their problems, but dont propose a solution. As mentioned above, the effects of the brain drain are mainly negative. There are indeed also positive effects when looking at the long term, but its far from certain that the positive effects will outweigh the negative ones for many countries. The question remains can the underdeveloped and developing countries change their precarious situation? Can they encourage the schooled workers to stay in a country where the future is often uncertain, wages are low and career opportunities scarce? This seems impossible to be. That however doesnt mean that zilch can be done. Taking away some of the reasons to migrate will reduce the migration and its effects political and military stability, safety, less corruption, are just a few of the many reasons to flee a country and to reinforced a new life abroad. Whats more, if these problems are at least part solved the economical returns to investment on education will be higher. To conclude, there seems to be no real solution for this problem when looking at the sending countries. The only thing they can do is determination the disruption with the developed world. The magical formula to do so though, do not seem to exist.Its even more difficult to find a solution when we analyse the brain drain f rom the individual migrants perspective. It seems that the decision to migrate, when possible, is at first sight easily made. Can we goddam the high skilled workers living in an underdeveloped country to dream of a better paid job in a safer and more stable purlieu with more career opportunities? Are they impose on _or_ oppress to do so and is it wrong to leave a country that invested in them? Theres another aspect we must look at when we analyse the brain drain from the migrants perspective remittances and investments. Do these migrants have the moral duty to send back large sums of money? Do they have the moral duty to invest, when possible, in the country that educated them? Its better to leave the answer to the migrants themselves.Finally, we have the Western governments and companies who fight their war for talent. The United States of America, Europe and Japan all need new skilled workers to replace the baby-boom workers who will retire and the BRIC-countries need skilled w orkers to close the gap with the developed countries. Many countries and companies try to attract the same highly skilled talents and rely on international labour flows to fill in future gaps. The global competition doesnt give them a choice. If they dont attract enough talented workers, economic growth might slow down. In my opinion, we cant blame the developed countries for the brain drain. Every country tries to prosper. But should the Western World compensate the developing and underdeveloped countries for the brain drain? Should they make good the loss of skilled workers in