Emigration of Skilled Workers

Their effects on developing nations

Emigration is the net outflow of workers from a country seeking work opportunities, higher living standards and better prospects for their families. The perception is often of low-skilled workers employed in low-skilled jobs, though very little is noted of skilled migration. Individuals with degrees and education beyond school move abroad to work in high skill industries and earn substantial sums of money, which can benefit their home countries or hamper the prospects of the nation they are leaving behind.

On the one hand, the emigration of skilled workers positively affects developing countries as they send remittances home. $325 billion was sent home to developing countries in 2010, and remittances account for over 20% of GDP in Lesotho and Nepal. Hence, demand will be stimulated through these payments home, and economic growth could occur. Though, this relies on stable governments who can allocate these remittances accordingly. Corrupt sovereignty may hoard the benefits and prevent growth from occurring, which would have a negative net impact as the fruits of labour sent back home by the workers are squandered. Despite this, the emigration of skilled workers has a positive effect as it stimulates growth in their home country through remittances.

Additionally, the emigration of skilled workers positively affects developing countries as it allows for the more productive pairing of peoples’ jobs and skills. In countries like Morocco and Tunisia, unemployment amongst young workers is higher for those with degrees than poor education. It may be due to a lack of high-skilled opportunities in an underdeveloped economy or the high expectations set by the skilled. This point is reinforced by the O ring theory of development, where pairing highly skilled workers with other highly skilled workers produces greater output than mismatching skillsets. Hence, pairing workers more efficiently is likely to increase the earnings of the highly skilled, and therefore the home country can benefit through higher remittances and greater productivity.

On the other hand, the emigration of skilled workers harms developing countries due to the ‘brain-drain’ hypothesis. It results in a deprivation of skilled workers, which can damped innovation and growth while lowering healthcare and education standards that would have otherwise been realised. It has knock-on effects in the short-run in terms of lower growth and the long run as education and healthcare standards may deteriorate, causing a reduction in the trend rate of growth. Future generations are less likely to be influenced by intelligent individuals as they have emigrated, and their education will take a hit. It means that there is unlikely to be any skilled workers available to emigrate in the future as the country will be deprived of them.

Additionally, the emigration of skilled workers hurts developing countries when families choose not to return. The positives associated with remittances being sent home that can drive economic growth may not be present if skilled workers decide to relocate elsewhere and neglect their home nation. It can also lead to a declining population of people of working age in the developing country, resulting in higher labour costs and a more significant proportion of older people who cannot work. As a result, growth may stall, and governments will have to allocate more capital towards caring for the elderly rather than towards infrastructure projects aiming at boosting investment.

To conclude, the effects of emigration of skilled workers to developed countries depend mainly on their government’s competency. Squandering remittances has tremendous opportunity costs regarding the development projects and investment spending that could have otherwise been implemented into the country. Though, assuming that governments are stable, then the emigration of skilled workers can profoundly affect developing countries. Remittances can offset the gaps created in the workforce from the outflow of individuals by investing in capital and equipment to boost productivity and efficiency in the economy; this will ultimately lead to economic growth and higher living standards.

If you enjoyed this article please👏 (up to 50 times) or if you have any feedback feel free to comment below!

Ted Jeffery