(xpost)

Really excited to see where this substack goes, but I have to start off with some disagreements! The remittances point is fine, as is return migration. But the literature on brain gain has always seemed pretty uncompelling.

The most obvious problem is that increasing the supply of skilled workers requires both increasing demand for education (which emigration possibilities do) and increasing the supply of education. The latter is not a given in any country. Expanding college enrolment is hard. New colleges need staff, instructors, and administrators, all of which are scarce. Government colleges need to be established by a bureaucracy, private colleges need to be regulated and quality-controlled, both of which require a lot of governance capacity by the country. We can't just handwave the claim that if more people want to become doctors, more people can become doctors.

So I'm concerned that there's a site selection bias in the countries studied in this literature. People are writing papers about the countries that did manage to successfully pull off a large educational expansion, so they find that emigration boosted human capital. But for countries that can't pull it off, emigration really might be a brain drain.

How large could this site selection bias be? I pulled some data on college enrolment rates and emigration (net, not for any skill group) and compared India and the Philippines to the rest of them. (There was no data on Cabo Verde, the other country you cited.) Among the top 20 emigrant-sending developing countries, India had one of the highest increases in college enrolment (21 pp) between 1990 and 2015, while the Philippines was a bit above average (13 pp). As a specific contrasting example, Nigeria had only a 7 pp increase in college enrollment during this period. (data, graph)

A similar picture emerges when comparing India and the Philippines to developing countries as a whole. India has close to the highest enrolment growth over this period, and the Philippines is still above average, while Nigeria is still below average. (graph) So we should not expect Nigeria's brain gain to be anywhere close to that of India or the Philippines.

You could argue that India and the Philippines had higher growth because emigration incentives increased the supply of education. But:

1. The emigration incentives studied by Khanna/Morales and Abarcar/Theoharides are not India-specific or Philippines-specific - this fact is necessary for their estimates to be causal! - so we shouldn't expect these countries to have larger increases in enrolment just from emigration incentives.

2. Even if emigration incentives have a causal effect on the supply of colleges that was for some reason higher in India and the Philippines, I would expect that effect to be small relative to other factors that make governments want to supply more colleges (domestic political projects, trying to attract foreign companies, trying to spur industrial growth). So heterogeneous effects of emigration incentives can't explain much of the difference between these two countries and other developing countries.

In general, I wish there was more nuance around the brain gain hypothesis. I would speculate it has such immediate acceptance because it resolves our conflicting commitments as cosmopolitans: we want people to be able to pursue a better life, we want high-income countries to have more open immigration policy, and we want low-income countries to grow faster. The brain gain hypothesis is alluring because it promises that we can have all of the above. But I think that relies on other things going right that absolutely don't have to go right. And I wish there was more acceptance of that nuance.

One factor missing from this post is the distribution of skill. Attracting the most skilled locals away from your country is likely to lose almost all of the individuals who are orders of magnitude more valuable than average. I am no fan of Great Person Theory, but categorically removing an entire band of workers from the country during their prime productive years should almost ensure that the benefits of those impacts don't accrue back home. Additionally, the top people in a given career would presumably be there anyway, and the actual counterfactual increases are in the lower tail of the skill distribution; this is borne out by the Filipino nurses example you cite, which notes that average nurse quality declined.

Consider the Indian software industry that you mention. How much stronger would it have been if the likes of Satya Nadella and Sundar Pichai had not found it overwhelmingly valuable to migrate to the U.S.? Not just them, but nearly the entire top X% of their graduating classes? If they had started businesses there, what proportion of the Indian software industry would be working for local companies instead of sending their surplus value overseas? How much more tax revenue would their governments raise?

(Also, it would be remiss not to mention that Nadella and Pichai probably don't send 10–15% of their salary back to India; and in fact, if they were interested in developing the Indian software economy, they'd choose to pay a bit more than merely ~20% of the U.S. compensation for the same graduate-level jobs)

If, as you note, the brain drain calculus depends on remittances, increased workforce, returning home, and broader contributions to or investment in the local economy, the impact of losing the top X% of skilled individuals may very well tip those scales. So I think it's unreasonable to claim that the policy concern is "completely misplaced" and that countries should, as a rule, encourage their skilled people to seek the best opportunities—this is very strong language!

This is interesting and definitely updates me a bit, but like others I'm still not convinced. 

One thing I think Huw alludes to, but nobody else have spelled out, is considering net effects on other economic sectors than the ones directly studied. (In economics language, "consider general equilibrium more broadl"y). You say:

If the supply of doctors and nurses is fixed, this is a valid concern. In the real world, the supply of doctors isn’t fixed. When people have the option to earn qualifications in order to go abroad and earn more, they are much more likely to pursue those qualifications. When doctors can go abroad (and earn more), more people want to become doctors. Some of these additional doctors will end up leaving, but some will end up deciding not to.²

This is exactly what happened in the Philippines when US visa rules changed to make it easier to move there as a nurse. Many more Filipinos decided to train as nurses; new nursing colleges opened to accommodate the demand. Many of the newly trained nurses did end up moving, but not (even close to) the majority. Even after some left for the US, the Philippines ended up with considerably more nurses than they’d had before.

The same happened in the IT sector in India. Many people in India went to school and learned IT because they hoped to migrate to the US. But not all ended up getting visas to the US - and those that stayed behind helped start the Indian software boom. India did not end up worse off because people tried to migrate; instead, they ended up with more skilled people than ever before.

Imagine a simple model/story where there's unidimensional STEM competency, call it s. In such a world, perhaps what happens is that some countries with a good fit for a sector (for sake of argument, IT in India, nurses in the Philipines) would have many people in the 99th percentile in s enter that sector without emigration. If emigration via that sector then becomes popular, perhaps 95th-99th percentile people will all enter that sector. Then when the 99th percentile leaves, the remaining people in the 95th-98th percentile people will still buttress the sector (average quality goes down but the effects on that sector are muted because the overall quantity of qualified people goes up). 

However, this masks the effect where other sectors are indirectly affected by brain drain to the exporting sector. (In such a world, perhaps the counterfactual without exports would be that India would have great nurses, or the Philipines would have a tech boom). 

So you can't necessarily infer from a specific sector not suffering that the overall counterfactual effects of emigration are net positive.