To What Extent is Brain Drain Problematic for Developing Countries (Essay Sample)

To What Extent is Brain Drain Problematic for Developing Countries
Brain drain can be defined as transfer of resources internationally especially in the form of human capital. Brain drain term applies for migration of relatively educated people from developing to the developed countries to earn more money and better working conditions. As per the survey, it was found that by the end of the year 2000, there were approx. 20 billion immigrants (Beine, Docquier, & Rapoport, 2008). Total of 64% increase is observed in the last decade. Whereas, for the unskilled immigrant, about 15% increase in migration is observed.
Since long, Brain Drain is a very serious issue for developing countries. Scholars argue that brain drain would raise the expected return in terms of human capital. It would also expand the investment in providing education. Hence, the beneficial brain drain or brain gain is observed for lower skill level of human capital with lower rate of emigration. In several small countries of Sub-Saharan Africa and Central America, the situation is quite troublesome. Whereas the countries like China, Brazil and India have been experiencing very small gains. Brain drain is win-lose situation, where developed country’s brain gain is brain drain of developing country.
Therefore, essay is critically analyzing harmful impact of brain drain for developing countries. Particularly, there are very few evidences regarding the propensity of skilled migrants to their home country. Major alarming issues are Standard welfare loss, skill shortage, smaller flow of remittance and low return on education expenses caused by brain gain. The aim of this essay is to explore whether the concept of “brain drain” has impact on developing countries and is supporting brain drain good for the host country or not?
Brain drain causes standard welfare loss for host country. With the implementation of Brain Drain, host country’s existing population is compelled to bear significant losses and global inequality. Vulnerable economies are major reason of increased immigration of skilled workforce. The highly skilled emigrants don’t pay taxes in their home county. However, host country doesn’t get any economical benefits as result of immigration of highly skilled workers. Therefore, as the skilled workers are migrated, marginal productivity of host country shifts inwards (Docquier, & Rapoport, 2012).And, Debt, already sluggish economy of developing countries are not in the favorable position to convert brain drain into brain gain.
Developing countries invest in education and training for highly skilled workers. However, brain drain doesn’t give expected return on education which negatively impact GDP. According to Bhagwati and Hamada (1974), brain drain is more precarious than unemployed skilled worker in developing country. Marginal productivity of high skilled workers is very low, if the skilled person is unemployed involuntarily. To get the high marginal productivity the skilled person might move inland in the absence of any opportunity to move developed country. A political approach states that brain drain may result in a good return on the investment made on education. Literature reviews favors that brain drain foster the growth and incentive on the education. Better living standard and higher wages of skilled emigrants motivates other to choose similar career path or education. Hence, the income per capita is hugely affected by the high cost of education and the fall in the skilled employment. Hence, it can be concluded that in the country, where social welfare is dependent on income per capita, brain drain will cause low welfare (Borta, 2007).
Shortage of skills is other consequences of brain drain. Human capital is always considered as growth engine for nation. Brain Drain creates shortage of manpower for the important activities; it weakens the countries’ strength and ability for implementing any new technology. There is the main concern that has been raised with it, that due to migration, the host countries have a shortage of entrepreneurial workers. Employment of highly skilled workers in the organizations will have positive impact on the growth of developing countries. On the contrary, a huge gap in terms of technology is observed in the developing and developed countries. Because, technological progress of the country to the maximum extent, is positively linked with formation and stability of human capital. For an example, in the period from 1960 to 1987, a total of 30%skilled worker migrated from sub-Saharan Africa. The Caribbean has also been facing the same issues because of close proximity to the US and easiness to emigrate there (Docquier, 2014). In Jamaica, for retaining one doctor, government needs to train five doctors.
As per the data received from IMF, total remittance was observed as US $65 billion (Faini, 2003). Literature review favors the brain drain and claim that in many countries, remittances play an important role in foreign exchange. However, Brai...