International Migration, Remittances, and the Brain Drain

Abstract

Knowledge of the economic effects of migration, especially its impact on economic development, is rather limited. In order to expand knowledge on migration, and identify policies and reforms that would lead to superior development outcomes, this volume presents the results of a first set of studies carried out on the subject. Current demographic trends in both developed and developing countries are pointing toward significant, potential economic gains from migration. The labor forces in many developed countries are expected to peak around 2010, and decline by around 5 percent in the following two decades, accompanied by a rapid increase in dependency ratios. Conversely, the labor forces in many developing countries are expanding rapidly, resulting in declines in dependency ratios. This imbalance is likely to create strong demand for workers in developed countries' labor markets, especially for numerous service sectors that can only be supplied locally. There are large north-south wage gaps, however, especially for unskilled and semiskilled labor. Part 1 of this book, Migration and Remittances, examines the determinants of migration, and the impact of migration and remittances on various development indicators, and measures of welfare. Among these are poverty and inequality; investments in education, health, housing and other productive activities; entrepreneurship; and child labor and education. It focuses on different source countries, use data collected via different methodologies, and employ different econometric tools. Their results, however, are surprisingly consistent. Part 2, Brain Drain, Brain Gain, Brain Waste, focuses on issues related to the migration of skilled workers, that is, the brain drain. It presents the most extensive database on bilateral skilled migration to date, and also examines a number of issues associated with the brain drain, that have not been emphasized in the literature so far, uncovers a number of interesting and unexpected patterns, and, provides answers to some of the debates. This volume deals essentially with economically motivated south-north migration, whose principal cause is, in most cases, the difference in (the present value of) expected real wages, adjusted for migration costs.