Do skilled immigration policies harm developing countries?

Question

There are a number of countries that will only allow people to migrate to their countries who have a high level of education / skills. e.g. Doctors, engineers and what ever skills are required at the time.

What i want to know is that do these programs that target skills specifically reduce the overall level of welfare in the source country by taking away skilled people or is there no real impact to this.

This results in people from many less developed countries moving to the more developed countries, taking the skills knowledge and possibly the people who will strive for change from that country. Or maybe I'm wrong and the people leave for a while and them come back bringing additional benefits with them and possibly sending money back while they were out of the country.

I can speculate but do not really know.

Answer 1

As Philipp stated, this is a recognized problem known as Human Capital Flight, or less formally "Brain Drain", or even less formally "The Giant Sucking Sound"

To dig into this a bit further, there are a variety of reasons an educated person in a less-developed country would emigrate to a developed country. Just because someone is benefiting from the system of skilled immigration policies of a developed country doesn't necessarily mean they are migrating solely for economic purposes. For instance, if a country is actively engaged in civil war the flight of human capital is an incidental issue and migrants may later return.

Let's isolate economic migration then. If a skilled person is migrating due to a lack of employment in their country, then the country is not losing out from the flight of this person as they have already failed to create conditions that create demand for the person. If this person has demand for their skills and migrates for better pay, then the country is losing out. It is not a total loss however, as remittances from economic migrants provide cash flow to less-developed countries. Especially with the emergence of robust fintech services in recent decades, personal remittances have skyrocketed. The amount of money being sent back home by migrants is substantial, in Mexico it accounts for almost 3% of GDP. The highest %GDP recipient is Nepal, with nearly a third of their GDP coming from remittances. Economic migrants can earn more in a day than many in their home country make in a year, and while a country may be missing out on skilled labor, they at least receive some recompense in this cash flow.

While on the surface it's not an ideal situation for LDCs, in the long run open trade and open borders boosts growth and efficiency for all countries, developed or not.

Answer 2

In my opinion, there is not any clear answer to your question.

What if these people left their country because they could not be utilised? e.g. an egyptian nuclear physicist. He would never find a job there, because there's not nuclear physics supply.

Then we need considerate the behavior of the imported human capital. Will they consume and invest in the country they work, or will they save in order to consume/invest to their home country?

Then, if he saves or sends money back, what's the marginal benefit of that country? We don't know.

Answer 3

From https://en.wikipedia.org/wiki/Human_capital_flight#Advantages_.28brain_gain.29 "Research suggests that migration (both low-and high-skilled) is beneficial both to the receiving and sending countries.[154][155][156] According to one study, welfare increases in both types of countries: "welfare impact of observed levels of migration is substantial, at about 5% to 10% for the main receiving countries and about 10% in countries with large incoming remittances".[154]"

154. http://onlinelibrary.wiley.com/doi/10.1111/jeea.12110/abstract

155. http://documents.worldbank.org/curated/en/672181468185348016/Global-migration-revisited-short-term-pains-long-term-gains-and-the-potential-of-south-south-migration

156. http://www.cream-migration.org/publ_uploads/CDP_24_16.pdf