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n my last article, I discussed a series of arguments in favour of open borders. Given that such a policy is not under serious consideration by any national government or major international organization, there is clearly significant opposition to open borders. Counterarguments to this policy often focus on the adverse effects of immigration on host countries. As the literature regarding this particular concern is extensive, I will instead focus here on the negative consequences of emigration on source countries.
The effects of brain drain on developing countries have long been thought to be clear. One would empirically expect that greatly expanded emigration would deplete developing nations of their highly skilled workers as they pursue higher wages and more attractive living conditions in developed countries. This view is supported by traditional economic literature. A 2013 study found that the effects of brain drain are so strong that increased public expenditure on education is in factnegatively correlated with human capital formation in developing countries. This counter-intuitive result is explained by the fact that many developed nations, Canada included, have shifted to a points-based immigration system that favours skilled candidates. Developing nations that invest heavily in education merely create a larger pool of citizens that qualify to migrate to developed nations as skilled workers. This simultaneously deprives them of the bulk of their human capital and forces them to shoulder the burden of educating workers whose productivity will accrue to developed nations.
What is the fundamental cause of brain drain? A model created by David de la Croix and Frédéric Docquier of the Université catholique de Louvain suggests that the phenomenon essentially represents a coordination failure. Data on the educational makeup of developing nations and their respective diasporas indicates that countries such as the Philippines, Peru, Jamaica and Latvia would have more human capital than some Western European nations if all of their expatriates with post-secondary educations returned home. The model also predicts that if this were to occur, many small states would reach a productivity level sufficient to retain their skilled workers. This suggests that brain drain is both a cause and an effect of underdevelopment – a vicious cycle. To reverse it, the creators of the model propose to either subsidize the repatriation of highly-skilled workers or to impose an expatriation tax on those who seek to leave. These proposals contrast sharply with the basic premises of open borders.
However, more recent literature has yielded different conclusions that may lend credence to the potential for open borders to aid developing nations. Michel Beine and Khalid Sekkat have found that the emigration of skilled workers to developed nations leads to the transfer of positive norms back to their source countries. Another heavily cited paper by Beine suggests that more citizens of developing nations pursue higher education when offered the possibility of migrating to developed regions, as the expected return on human capital is much greater there. Beine nevertheless tempers his conclusions with a caution that taxes and subsidies similar to those proposed above may be required to ensure that the net benefit of investment in education is positive for source countries.
Could remittances help mitigate the impact of brain drain? A 2008 paper by Yoko Niimi found that remittances in fact decrease as the share of migrants with tertiary education increases. This unexpected result could be explained by two factors. First, highly-educated migrants tend to come from relatively affluent families who require fewer remittances. Second, skilled migrants are better able to help their families migrate as well. As remittances are primarily sent to family members, the incentive to send them is vastly diminished when a skilled migrant’s family joins him or her in a developed nation.
While emigration is a very attractive option for skilled workers in developing countries, such actions have significant negative consequences for their native countries. Their education, if subsidized with public funds, represents a wasted investment for their source countries, which can hardly afford to absorb such a loss. Additionally, the emigration of skilled workers depletes the human capital of their source countries, causing them to undergo less development than they otherwise would. Open borders advocates reply to these concerns with the maxim that “people develop, not places.” Nevertheless, even in a world without restrictions on migration, there will remain a minority that is incapable of availing themselves of this option. This minority will inevitably be composed of the world’s most vulnerable citizens: the elderly, the mentally ill, the disabled, and those who simply cannot afford to travel to more developed regions. Any viable open borders proposal must account for the welfare of these groups to prevent social collapse in the areas where they remain.
