Rich countries woo highly skilled migrants

By Steve Schifferes

BBC News Online economics reporter

Rich countries are increasingly competing to recruit highly skilled
immigrants to meet labour shortages in key industries like IT. But are
poor countries losing out?

Much attention - especially in the UK - has been focused on the controversy over the growing numbers of asylum seekers.


Far less has been paid to another part of the migration story - the
growing number of highly skilled immigrants who are working abroad. While many countries are trying to limit the number of
asylum seekers permanently settled on their shores, they are
simultaneously trying to increase the number of people with specific
skills and high levels of education and skills whom they want to
encourage to move there. In Britain, for example, around two-thirds of foreign
workers who came into the UK in 2002 (103,000 out of 160,000) are
classified as being in professional or managerial occupations, a
considerable increase compared with 10 years ago. And while definitions of what constitutes "highly
skilled" varies, using the broad yardstick of being educated to degree
level and above, increasing numbers of university graduates from
developing countries are heading for greener pastures abroad. According to Professor Richard Black of the Sussex
Centre for Migration Research, a substantial proportion of African
graduates now live outside the continent. One estimate suggests that 60% of Gambia's university
graduates, 25% of graduates from Sierra Leone, and 10% from Kenya, are
now US residents.

Who is coming?

Highly skilled migration has always existed, of course.


But until recently, it mainly consisted of high-powered bankers and
multinational company executives who were seconded from one rich
country to another.

Now new sectors have become more prominent, and developing countries more important.

The IT industry, especially in its Silicon Valley heartland in the US,
has become dependent on Indian and Chinese software engineers.

One-third of new IT start-up companies in California are now run by immigrants.

India has both exported workers abroad, and now increasingly
capitalised on their expertise and Western-trained skills to set up
outsourcing companies back home. Secondly, the shortage of key public sector
professionals has led to an explosion in the recruitment of doctors,
nurses and teachers, and here Britain leads Europe and probably the
world. Britain recruits nurses and doctors from developing
countries like India, South Africa and the Philippines, while relying
on other Commonwealth countries like Australia and Canada to meet
teaching shortages in the South-East of England. And the new workers are increasingly coming on a
temporary or contingent basis, even in professions like accounting,
with shorter assignments abroad and no guarantee of a return.







Competing countries

According to Professor John Salt of University College London's
Migration Research Unit, competition between countries over attracting
skilled migrants has become more intense.

The US and the UK have created special immigration schemes to attract
them, competing with existing schemes that have existed for some years
in Australia, Canada, and New Zealand. In Germany, a new "green card" scheme has been introduced
to recruit foreign IT specialists and to train 250,000 domestic
specialists by 2005. The new approach involves the governments working
closely with employers to work out where labour shortages exist, highly
tailored to specific requirements by industry - and then to fast-track
admissions on a temporary basis. California IT employers, for example, pushed hard for
an expansion of the US H1B temporary visa scheme, which at its peak
admitted 193,000 workers per year. Less successful have been attempts to attract
entrepreneurs, with many countries offering free immigration for
business people with assets over $1m. Professor Salt says that such schemes are poorly
targeted and poorly monitored as it is hard to establish whether the
entrepreneur actually spent the money in the country he migrated to and
created any jobs.


Harmful 'brain drain'?


Developing countries worry that by sending many of their highly skilled workers overseas is costing them dear.




They lose the money they spent on educating their young people to a
high standard, and they may lose those with an entrepreneurial spirit
as well.




But most studies show that in the long-term such migration benefits developing countries more than its harms them.









They receive more money back from the migrants who send remittances back home to their families.





And when the migrants eventually return, as many do, the new skills and
technologies they have acquired can be used to boost living standards
at home.



This is particularly true of middle income developing countries, according to Professor Black.





He says that the Philippines deliberately decided to over-produce
nurses to work abroad, who now make a huge contribution to the economy
through the remittances they send home. But he warned that in other poorer countries, for
example in Africa, the benefits could be less, especially if they could
not absorb the returning migrants in productive ways in their own
economy. And the skills learned in African universities may be
less transferable abroad, leading African graduates to end up working
in dead-end jobs in other countries.

Do the workers lose out?

Although most economists believe that migration is a net benefit to
both sending and receiving countries, and that highly skilled migration
is particularly beneficial, there is no doubt, according to Professor
Salt, that there are major distributional effects. For example, most highly skilled UK migrants live in
London and the South-East, boosting that region's economy at the
expense of other regions. And sectors such as IT and finance, which receive the
most skilled migrants - who get the best and the brightest from around
the world - also prosper at the expense of firms in sectors which are
less well-endowed with human capital. And to some extent, companies benefit at the expense of
workers, as salaries are lower than otherwise due to the important of
extra skilled workers, while profits are probably higher. Estimates by Harvard Professor Jorge Borjas, however,
suggest that the benefit to both the US economy and the taxpayer are
greater for highly-skilled immigrants. For example, an immigrant with below-average education
will cost the US about $13,000 per year; however, one who has at least
two years of college education generates $198,000 in taxes over his
lifetime.






Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/uk_news/3435231.stm



Published: 2004/03/24 18:20:09 GMT



© BBC MMVI