Intellectual Property

In Defense of Brain Drain

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Could brain drain be good for poor countries? A new study finds that when "brains" leave their native countries, their fellow citizens may benefit more from their smarts and creativity than if they had chosen to stay.

Imagine, if you will, foreign movie makers who come to California. They are much more likely to make excellent movies there–or even to make movies at all, really–and more of their countrymen will get to watch them when they appear, especially if their countrymen have few qualms about bootlegs.

The authors, economists Peter J. Kuhn and Carol McAusland, write that those who remain behind "benefit because 'their' brains produce 'better' knowledge (such as more effective medicines, more entertaining movies, or more effective software) abroad than if they had remained at home." This is particularly true in situations where a discrepancy between protections for intellectual property at home and abroad makes it easy for residents of the innovators' countries of origin to enjoy the fruits of their labors with low transaction costs.

Previous studies have demonstrated the benefits of cash remittances and return migration, suggesting that money (and people) returning after a stint abroad is the best arrangement. Likewise, the possibility of making big money abroad seems to lead to higher overall educational attainment in certain circumstance. Since not everyone who dreams of emigrating and prepares to do so actually will, those who remain behind may be better educated overall. The mere possibility of skilled worker emigration can "jump start" an economy.

Emigrants who produce "knowledge goods" for large foreign markets also create the largest gains for their home countries: "The emigration of a physician who spends all of her time treating patients (a private good) may be more likely to hurt the remaining residents of her country than the emigration of a physician primarily engaged in research on new treatments and medicines," the paper reports.

There are legitimate concerns that brain drain's short term benefits disguise the high costs of slowed long term growth in developing countries, but the body of work on the surprising upside of brain drain is growing.