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21. Skill Flow: A Fundamental Reconsideration of Skilled-Worker Mobility and Development

Author:
Michael Clemens
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Large numbers of doctors, engineers, and other skilled workers from developing countries choose to move to other countries. Do their choices threaten development? The answer appears so obvious that their movement is most commonly known by the pejorative term “brain drain.” This paper reconsiders the question, starting from the most mainstream, explicit definitions of “development.” Under these definitions, it is only possible to advance development by regulating skilled workers' choices if that regulation greatly expands the substantive freedoms of others to meet their basic needs and live the lives they wish. Much existing evidence and some new evidence suggests that regulating skilled-worker mobility itself does little to address the underlying causes of skilled migrants' choices, generally brings few benefits to others, and often brings diverse unintended harm. The paper concludes with examples of effective ways that developing countries can build a skill base for development without regulating human movement. The mental shift required to take these policies seriously would be aided by dropping the sententious term “brain drain” in favor of the neutral, accurate, and concise term “skill flow.”
Topic:
Development, Migration, Labor Issues, and Brain Drain

22. Income Per Natural: Measuring Development for People rather than Places - Working Paper 143

Author:
Michael Clemens and Lant Pritchett
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. We create a first estimate a new statistic: income per natural—the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50% higher than GDP per resident. For 1.1 billion people the difference exceeds 10%. We also show that poverty estimates are very different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States. These estimates are simply descriptive statistics and do not depend on any assumptions about how much of observed income differences across naturals is selection and how much is a pure location effect. Our conservative, if rough, estimate is that three quarters of this difference represents the effect of international migration on income per natural. This means that departing one's country of birth is today one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
Topic:
Demographics, Development, Economics, Migration, Poverty, and Population
Political Geography:
United States and Albania

23. The Place Premium: Wage Differences for Identical Workers across the U.S. Border - Working Paper 148

Author:
Michael Clemens, Lant Pritchett, and Claudio E. Montenegro
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We compare the wages of workers inside the United States to the wages of observably identical workers outside the United States—controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. We then use five independent methods to correct these estimates for unobserved differences between the productivity of migrants and non-migrants, as well as for the wage effects of natural barriers to international movement in the absence of policy barriers. We also introduce a selection model to estimate how migrants' wage gains depend on their position in the distribution of unobserved wage determinants both at the origin and at the destination, as well as the relationship between these positions. For example, in the median wage gap country, a typical Bolivian-born, Bolivian-educated, prime-age urban male formal-sector wage worker with moderate schooling makes 4 times as much in the US as in Bolivia. Following all adjustments for selectivity and compensating differentials we estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). We document that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that imply allowing labor mobility can reduce a given household's poverty to a much greater degree than most known in situ antipoverty interventions.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
United States, Nigeria, and Bolivia

24. Skilled Emigration and Skill Creation: A quasi-experiment

Author:
Satish Chand and Michael Clemens
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Does the emigration of highly-skilled workers deplete local human capital? The answer is not obvious if migration prospects induce human capital formation. We analyze a unique natural quasi-experiment in the Republic of the Fiji Islands, where political shocks have provoked one of the largest recorded exoduses of skilled workers from a developing country. Mass emigration began unexpectedly and has occurred only in a well-defined subset of the population, creating a treatment group that foresaw likely emigration and two different quasi-control groups that did not. We use rich census and administrative micro data to address a range of concerns about experimental validity. This allows plausible causal attribution of post-shock changes in human capital accumulation to changes in emigration patterns. We show that high rates of emigration by tertiary-educated Fiji Islanders not only raised investment in tertiary education in Fiji; they moreover raised the stock of tertiary educated people in Fiji—net of departures.
Topic:
International Relations, Education, Markets, and Migration
Political Geography:
Asia and Australia/Pacific

25. Do Visas Kill? Health Effects of African Health Professional Emigration

Author:
Michael Clemens
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The emigration of highly skilled workers can in theory lower social welfare in the migrant-sending country. If such workers produce a good whose consumption conveys a positive externality—such as nurses and doctors in a very poor country—the loss can be greater, and welfare can even decline globally. Policies to impede emigration thus have the potential to raise sending-country and global welfare. This study uses a new database of health worker emigration from Africa to test whether exogenous decreases in emigration raise the number of domestic health professionals, increase the mass availability of basic primary care, or improve a range of public health outcomes. It identifies the effect through two separate natural quasi-experiments arising from the colonial division of the African continent. These produce exogenous changes in emigration comparable to those that would result from different immigration policies in principal receiving countries. The results suggest that Africa's generally low staffing levels and poor public health conditions are the result of factors entirely unrelated to international movements of health professionals. A simple model proposes that such results would be explained by segmentation of health workforce labor markets in the sending countries. The results further suggest that emigration has caused a greater production of health workers in Africa.
Topic:
International Relations, Health, and Migration
Political Geography:
Africa