Migrations, Brain drain: What explanatory factors in the Caribbean

Migrations, Brain drain: What explanatory factors in the
Caribbean Island?
Fanny-Aude Bellemare
Student Ph.D in economics at CEREGMIA (Centre d’Etudes et de Recherches en Economie, Gestion,
Mathématique et Informatique Appliquée), University of French West Indies and Guyana.
Email : [email protected]
Abstract: Far from being a new phenomenon, the
international nobilities increased since the 60’s.
Today, the context of globalization accelerate the
migratory dynamics at the same time observes a rise
of the educational levels. The increase of the brain
drain in the Caribbean raises questions and
reflections.
This article attempts to examine the factors
explaining the skilled emigration rate in the
Caribbean. In a sample of countries most prone to
emigration of skilled labor over the period 19752008, the econometric estimation results in panel data
support and cripple both the migration theory.
Keywords:
Skilled emigration rate, Caribbean islands, brain
drain, panel datas.
Introduction
The natural disposition of men to migrate to areas
abundant in resources is undoubtedly concerned in
the economic cycle as a traditional phenomenon.
During the twenty-first century, migration is
generally ordered by the existence of economic,
political or social. Migration of the Caribbean
diaspora fits into this context. Far from being a
notable exception, it shows a sample world
highlighting the existence of multiple causes of
departures of flows of migrants. Analyzed in detail, a
point reflected with acuteness of a common
characteristic: a strong trend from the skilled
workforce. All the islands of the Caribbean island of
Cuba to Trinidad are prone to what is commonly
called brain drain. According to Ratha and Xu (2008),
four of the islands belonging to the Caribbean arc are
counted in the top 10 countries with high rates of
skilled emigration1 in 2005. For examples, Jamaica
1
This is the proportion of emigrant from the sum of
natives (residents and emigrants).
recorded a skilled emigration rates of nearly 82.5%,
81.6% of Haiti. Trinidad and Tobago and Grenada
respectively recorded rates of 78.6% and 66.7%.
The economic literature abounds on this subject.
Some economists justify the merits of skilled
emigration. First work (Grubel and Scott, 1966,
Johnson, 1967) emphasize that a skilled migration
generates positive externalities through various
transmission channels (remittances, networks, returns
of migrants). With an assumption of perfect
competition through the various channels mentioned
above, the adverse effects of brain drain can be
reduced. The emigration of skilled workers appears
therefore as a contribution to increasing the country's
economic growth starting in the long term. It allows
the regulation of excess population, level of
unemployment of skilled manpower and also to
improve levels of education.
However, recent theories state theses pessimistic
about the returns of skilled emigration on the
economy. Bhagwati and Hamada (1974), Haque and
Kim (1995). consider releasing some neoclassical
assumptions that a brain drain results in the loss of
public investment injected into the formation of labor
source countries, helping to increase economic
inequalities and reduces the capacity for innovation
country of origin. Docquier (2007) reinforces these
arguments by providing details on the level of skilled
emigration rates. The conclusion is that from an
analysis of the impact of the emigration of skilled
workers in developing countries, "a skilled emigration
rates positive but limited between 5% and 10% may
be good for development.
The empirical validity of this argument leads to
questions concerning the situation of Caribbean
island economies already subject to a high propensity
of international migration, and who mostly do not see
their rates below 20%. Note, other islands of the
Caribbean have rates of skilled emigration relatively
high, ranging between 20 and 60%: 61.4% with
Barbados, St. Lucia, with 36%, Cuba with 28.9%.
And, Dominica and St. Vincent have rates of about
58.9% and 56.7%. The migration will intensify in this
region characterized on one side by a distance from
major world markets, a high degree of openness and
the narrow margins of maneuver in economic policy
and the other by high population growth concentrated
populations in cities and rising unemployment. Given
the theoretical background and potential effects, what
are explanatory factors behind the skilled migration in
these island economies?
This study aims to define the explanatory factors’
brain drain in the Caribbean island ration for a set of
5 countries that are more prone to brain drain. In so
doing the fixed effects model in the next section there
is a review of the existing literature on migration
economic. The following section provides a
description of the methodology and data. In the fourth
section, the results of the empirical analysis and their
policy implications are presented. And, this is
followed by some concluding remarks.
Migration’s literature:
“revisionism”.
The
macroeconomics
The economic literature on migration emerged in
1960. The term brain drain commonly used today,
appears for the first time in an article in the British
Royal Society (1963), to describe the mass exodus of
skilled labor from the UK to major economic centers
of the North America (U.S., Canada).
Under the influence of increasing rates of migration
of labor, policy makers in countries of origin but also
home have questioned the fallen induced a brain
drain. Early theories emphasize a "Brain Drain"
generates positive externalities through various
channels of transmission (transfers of funds, local
labor market, technology, networks, returns of
migrants) Grubel and Scott (1966); Johnson (1967),
Miracle and Berry (1970). With an assumption of
perfect competition, through the various channels
mentioned above, the adverse effects of brain drain
can be reduced. The emigration of skilled workers
appears therefore as a contribution to increasing the
country's economic activity starting in the long term.
In 1970, a wave of pessimistic work is a logical
tracking of negative impact of skilled emigration
(Bhagwati and Hamada, 1974.1975, Haque and Kim
1995). The thesis states that a learned brain drain led
to the loss of public investment injected into the
formation of labor source countries, helping to
increase social inequalities, declining per capita
product and capabilities innovation of the country.
Therefore, the Bhagwati tax (1972), failed proposal is
intended to presumptive taxation of skilled emigrants
in order to compensate the loss caused by their
movements to developing countries. The brain drain
generates negative externalities for developing
countries, thereby limiting their economic growth.
According to McCulloch and Yellen (1975, 1977) "is
a zero sum game where the winners (the rich) get
richer and the losers (poor) get poorer." Docquier
(2005) reinforces these arguments by providing
details about the level of skilled emigration rates.
Above 15%, a rate of emigration of the skilled
population is detrimental to growth in developing
countries. Optimal levels of skilled emigration to be
between 5 and 10%.
The modern theory of endogenous growth is returning
to the study of positive effects of brain drain. Brain
drain entails positive externalities on education level
and wages. Mountford and Stark (1998) show that
brain drain may create more human capital and even
increase the average level of education. The
application of restrictive measures and policies on
labor migration in receiving countries grows skilled
workers attracted by jobs, sustainable increase their
skills. A probable emigration of skilled workers
implies behavior of "investors" in education and / or
training to increase their qualifications. They continue
their studies longer. Eventually, migration generally
less important than the actual migration leads
provided compensation for the induction of negative
effects of brain drain. Eventually, effected an increase
in returns to education. However, these arguments are
nuanced. Lucas (2004) keeping the same assumptions
was that increased the qualification of workers may
be inadequate for the needs of a country. Thus,
graduates may not be employable in the labor market
and in fact do not induce an increase in human
capital.
Mountford (1997), explains from thinking in terms of
wages, the brain drain as a determinant of
productivity growth in an economy as it is an
increasing function of the proportion of educated
people in economy. From an analysis of small states,
temporary or permanent emigration upward impact on
income level or income equality.
Contributions initiated an empirical perspective
redeploy the existence of an ambiguous relationship
between brain drain and growth. Without questioning
the theoretical results found, despite the unavailability
of time series, empirical work produce results for.
Carrington and Detragiache (1998) pioneering
calculations of the rate of emigration estimate from
data recorded in the U.S., the rate of emigration by
level of education, accusing the distinction between
three levels of qualification. Docquier and Marfouk
(2004) improve the measurement of skilled
emigration rates for a larger sample representing 175
countries over the period 1990-2000. Defoort (2008),
provides new estimates on a longer period of
migrants residing in the countries of the OECD taking
into account the structure by level of qualification.
This work feeds the empirical studies analyzing the
effects of brain drain on economic growth through
various channels.
Migration theory reveals its extension number
contradiction. The consensus around the positive and
negative effects of brain drain is not clearly
established.
Methodology and
Caribbean Ilands.
data:
Application
to
the
To test the theoretical results in our previous
econometric study, we will estimate from an
endogenous variable: the rate of skilled emigration.
The rate of skilled emigration sends a clear view of
the size and power level of the brain drain (Docquier,
2004).
The general model is written thus
+
+
The coefficients are fixed (hence the title fixed effects
models) and the heterogeneity of individuals is
manifested by a constant specific to each individual.
The fixity of coefficients based on the assumption
that there is an identical behavior for all individuals,
including the heterogeneity must be considered. The
second
part
of
the
model
describes the general behavior of
through variables, constants and summarize the
specific
effects
of
each
individual.
The estimated fixed effects model is based on two
estimators:
- The estimator in first differences using
OLS
- The intra-individual estimator, which uses
OLS to differences in variables at their
average.
For this, statistical information within a sample of 5
countries have been colect. The limited size of the
sample is justified because of the focus of our topic
on the island economies more prone to brain drain.
We have data on skilled emigration rates Rath and Xu
(2008) and Docquier and Marfouk (2006),
supplemented by information and economic statistics
from the Economic Commission for Latin America
and the Caribbean (ECLAC) and the World Bank.
We retain the last one. Thus, through the fixed effects
models, it is possible to consider the impact of skilled
emigration rates for the Caribbean: that beyond the
specificities of each country, shows the common
structure of the influence of emigration rates
qualified.
The fixed effects model
The dependent variable:
The treatment of the issue of contribution, based on
the methodology of econometrics of panel data. This
allows the estimation of regressions Explanatory
emigration rate, which illuminate the issue of
contribution in relation to questioning in the
introduction. The explanatory variables presented, the
proposed estimates are made using a tool: the fixed
effects
model.
The econometrics of panel data, considering the
double dimension individual and universal, is
particularly suitable for studying the explanation of
skilled migration rate in the Caribbean. In models
with individual fixed effects last, the influence of
explanatory variables is identical for all individuals,
and their heterogeneity is considered by a breakdown
of the constant b0nt becomes: b0 + year.
The indicator used is the rate of skilled emigration.
This is the proportion of emigrant from the sum of
natives (residents and emigrants).
Despite difficulties in its calculation, this indicator
has the advantage of being sensitive to convey a clear
picture of the size and power level of the brain drain
(Docquier, 2004).
Description of the variables and of the sample.
As little available data relating to skilled emigration
rates were extracted from the database and Marfouk
Docquier (2006) and Rath and Xu (2008), then
supplemented by economic statistics of the Economic
Commission for Latin America and the Caribbean
and the World Bank.
The explanatory variables:
According to theory, the causes of migration are
closely linked to demographic, sociological and
political. The model includes nine explanatory
variables of interest, representative of the socio
economics of the Caribbean islands (table 1) First, the
average growth rate of the population is selected.
Indeed, the Caribbean had 17 million inhabitants in
1950, 34 million in 1990 to just over 40 million in
2009. Throughout the second half of the twentieth
century, the Caribbean population has stopped
growing. Population pressure "inflationary" impact in
the Caribbean territorial distribution. The high
density, together with difficult conditions on the labor
market in urban areas is a fact widespread in the
Greater and Lesser Antilles. De facto, since 1950, the
population growth induces the displacement of
population in search of work and looking for better
social conditions. A trend which tends to continue
over the following decades.
Then we add the unemployment rate. The island
economies of the Caribbean are categorized for the
majority of such savings in the developing world.
subject to a high rate of unemployment. The average
unemployment rate for the 25 states in the Caribbean
is 10, 8% (International Labor Organization, ILO).
Gordon and Mc Cormick (1994) found an
insignificant positive impact on local unemployment
rates on the emigration of skilled labor.
Moreover, the GDP per capita, in purchasing power
parity) is an indicator of living standards and
Table 1: The explanatory variables
economic potential (Comte). Faini and Venturini
(1993) establish a significant correlation between
GDP per capita and the rate of emigration of skilled
labor. Their econometric findings emphasizes the
amplification of emigration as the per capita income
declined. Thus, the variable GDP per capita is
included as a proxy of monthly salary. This
preference is also emphasized in raisondes difficulties
in obtaining statistical information especially for
standardization of wages for a consistent comparison.
Education spending as a percentage of GDP, is
retained. This indicator determines the level of wealth
produced by a country that the government allocate
the education system. Variations in education
spending affect the average education level and
indirectly on the choice of migrants is retained.
The measure of human capital is apprehended by the
gross enrollment rate primary and secondary schools.
These indicators indicate the general level of access
to primary and secondary education. Barro (1989) to
identify the contribution of education on economic
growth, use education gross enrollment ratios. We
retain this approach in our estimates.
Finally, the Caribbean is considered one of the world
with the highest income inequality. The dynamic
unequal moved in time but also in the economic
structure of Caribbean island economies. The Gini
coefficient for the whole island is between 0.32 and
0.59 in 2000 (Table 1). Considered high levels of
inequality may influence social context and hence on
the stock of emigrants.
Var.
Txscop
Variables
Txscos
Gross enrollment rate (secondary)
deppup
% of public expenditures
txPIB_Hab
GDP/capita growth rate
txcho
unemployement rate
txpop
Growth Population rate
GNIDX
Gini Index
Gross enrollment rate (primary)
The sample:
The sample consists of 5 countries divided into two
middle-income countries, two income countries with
high income and one in low-income counties2. The
period is limited to five years by the limited
availability of data on the indicator skilled emigration
rates. Countries in the sample are: Barbados, Jamaica,
Haiti, Trinidad-&-Tobago and Grenada. The
statistical information within a sample of 5 island
economies of the Caribbean's most prone to brain
drain.
Descriptive statistic and Econometric estimations
Descriptive statistics: Caribbean brain export.
Various descriptive analysis conducted on the
evolution of migration in the Caribbean over the
period are unanimous in front of the strong
accelerating trend of migration in the period 19902000. Overall, migration has intensified. Varying
levels of migration of labor between 3 and 8% were
observed (Table 2). The best examples are those of
the Lesser Antilles. The French islands with an
increase of nearly 4 points, the highest rates of
migration and higher over the period 1990-2000.
Another example is that of English-speaking islands
like St. Kitts and Nevis and Saint Vincent and the
Grenadines.
2
Ad classifies by the Worl Bank 2009.
Table 2: Migrations3 the Caribbean countries
Population (thousands)
Migration (thousands)
1990
255
257
10 629
71
91
391
6 907
2 369
360
3 528
2000
304
267
11 199
71
94
428
8 142
2 576
383
3 915
1990
27
21
3
4
66
19
17
39
322
2000
30
25
100
4
8
83
26
13
54
383
7 061
8 373
103
136
Saint-Kitts-&-Nevis 42
38
4
4
Sainte-Lucia
Saint-Vincent-&the Grenadines
Trinitad-&-Tobago
Caribbean
131
148
5
8
106
113
4
8
1 215
33 907
1 294
37 941
51
909
41
1 071
Bahamas
Barbados
Cuba
Dominica
Grenada
Guadeloupe
Haiti
Jamaica
Martinique
Porto-Rico
Dominican
Republic
Source: Nations Unies (2002,2004,2005).
3
The data presented here refer to the number of people permanently living outside their country of birth.
Moreover, analysis by region reveals undoubtedly the
atypical case of the Caribbean migration of skilled
labor. The evolution of the few skilled emigration
rates of over 25, definitely the highlight of brain drain
in the Caribbean (Figure 1). If in the various regions
of the world, rates of emigration of highly qualified
people following the same trend, Figure 1 reveals a
priori a more sustained trend of changes in rates of
emigration of highly qualified compared to the
Caribbean other regions.
Figure 1: Skilled migration rate (%)
Docquier (2005, p.54) in conducting the regional
analysis proves the existence of a decreasing
relationship between population size and emigration
rates. In the case of the Caribbean, this evidence does
not seem satisfied. Because the other determinants of
migration in the Caribbean such as: political
instability, the conservation of colonial ties with
former colonial powers, or the proximity to some
developed countries, are neglected. Indeed, note
among the most populated islands belonging to the
Greater Antilles cohort, some of them recorded low
skilled emigration rates. For example, the islands of
Cuba, the Dominican Republic have relatively low
28.9% respectively, while their population
approaching 10 million. Conversely, Jamaica and
Haiti among the skilled emigration rate the highest,
82.5% and 81.6%, are countries with large
populations.
Table 3 highlights the propensity to emigrate of
skilled labor (by level of education) in the Caribbean.
The tendency to migrate is especially high levels of
education are high. The share of migrants with
primary education level remains low. A rate of
emigration of the workforce have achieved a level of
primary education by 8% against a skilled emigration
rates of 37% (for migrants with secondary education).
Meanwhile, the average rate of skilled migrants with
higher educational levels averaged 63% across the
Caribbean over the period 1970-2000. The islands of
Jamaica, Haiti, are most strongly inclined from the
qualified workforce. The emigration rate of the
workforce with a higher level of education in these
territories are aligned around 80%. After the islands
of Antigua and Barbuda, Saint Kitts and Nevis,
Trinidad and Tobago and Grenada, with rates of
around 70% .
Table 3: Emigration rate of labor (%) to the OECD countries between 1970 and 2000 by level of education
Primary
Secondary
Tertiary
Antigua-&Barbuda
6
36
71
Bahamas
2
12
36
Barbados
10
24
61
Dominica
8
61
59
Grenada
10
70
67
Haiti
3
28
82
Jamaica
8
30
83
Dominican
Republic
6
31
22
37
72
3
32
36
Saint-Vincent6
&-the
Grenadines
53
57
Trinidad-&Tobago
21
78
Saint-Kitts-&10
Nevis
Sainte-Lucia
Average
6
8
37
63
Source: Docquier.F, A. Marfouk, 2005.
The Caribbean is not standards or findings
determined by empirical analysis. The upward trend
of skilled emigration rates in the Caribbean island
territories appears to be continuing over the past ten
years.
The estimation results
In this part we will estimate the rate of emigration
qualified by taking the regression in panel data.
Indeed, it is based on the Haussman test to select the
specification with fixed effect or random effect. The
random effect is not appropriate for analyzing panel
data. We retain the fixed effect model.
For a better understanding of the results, we focused
reasoning in terms of elasticity by transforming the
variables in logarithm. The program used for this
purpose was the program Stata 10. The results of the
regression equation for all countries sample, for
middle-income countries and low income countries
on period, are presented in table 4.We conduct a step
down approach. Starting from the full model was
removed at each step the variable with the highest
level of p-value (Thenhauss, 2007). This level of pvalue must be above a threshold set a priori at α 10%.
Table 4 :
Stage
Variables
Txscop
t
1.59
P > |t|
0.136
Eliminated variable P≥ 0,10
1
Txscos
(-0.42)
0.681
Txscos
deppup
(-1;83)
0.090
txPIB_Hab
2.09
0.057
txcho
1.55
0.145
txpop
(-1.51)
0.154
GNIDX
0.77
0.458
Const
0.44
0.665
Number of groups = 5
Txscop
2.53
0.024
2
deppup
(-1.85)
0.085
txPIB_Hab
2.34
0.035
txcho
2.01
0.064
txpop
(-1.29)
0.113
GNIDX
0.74
0.474
Const
0.25
0.807
Number of groups = 5
Txscop
2.50
0.025
3
deppup
(-2.20)
0.044
txPIB_Hab
2.29
0.037
txcho
2.17
0.046
txpop
(-1.58)
0.135
Const
1.28
0.218
Number of groups = 5
Txscop
2.58
0.020
4
deppup
(-2.64)
0.018
txPIB_Hab
1.82
0.088
txcho
1.59
0.130
Const
1.10
0.287
R² = 0.598
Number of obs = 25
GNIDX
R² = 0.592
Number of obs = 25
txpop
R² = 0.577
Number of obs = 25
R² = 0.506
Number of obs = 25
Number of groups = 5
No one
At the first stage:
For the full sample, and after the first column, the
coefficient on secondary enrollment is negative and
statistically insignificant at the 10% threshold. This
result supports the assumption that in the Caribbean,
at the lower rate of access to secondary education
increases the rate of skilled emigration. Conversely, it
appears that in the insular Caribbean, the increase in
skilled emigration rates only slightly affects the rate
of secondary schooling. In the Caribbean islands of
improving education is not induced by high skilled
emigration. The theory does not seem to be affirmed.
At the second stage:
The Gini coefficient, the coefficient of the rate of
emigration of skilled labor still keeps its sign. An
increase in economic inequality than 1 Gini index is
likely to increase the rate of emigration. The
statistical results show that the coefficient of this
variable is positive but weakly significant or at
0.474%, the rate of skilled emigration.
At the third stage:
Regarding the demographic variable, the rate of
population growth shows an insignificant impact on
the rate of skilled emigration. This result appears
paradoxical in view of the segmentation of labor
markets in these economies. Indeed, one could
assume that the strong population growth in these
islands is clogging the application. The coefficient of
trade openness is negative and insignificant at 1%.
Finally, the last step:
It is clear that three variables contributed positively to
the explanation of the dependent variable for a
threshold of 1% while the percentage of public
spending in contributes negatively.
The coefficient of primary school enrollment rate is
positive and statistically significant at 1%. Indeed,
theory predicts a positive effect of improving the
level of education increased the rate of emigration.
The estimation results clearly show that a one
percentage point increase primary school enrollment
rate of emigration from their countries of origin by
2.58 percentage points. Regression coefficients also
give a positive and significant of unemployment.
Despite a threshold set at 10% we have chosen to
retain the meaning of the unemployment rate up to
13%. The high rates of unemployment prominent in
these island territories fosters a willingness to enter
the primary labor market (ie a stable and well paid)
and hence migration opportunities outside the country
of origin.
For these countries, an increase of one percentage
point of growth rate of GDP per capita would imply a
de facto increase in skilled emigration rates of 1.82%.
This result reinforces the idea of the myth of a better
life, greater opportunities in host countries
(industrialized countries). Clearly, an increase of
GDP per capita in the country of origin did not
influence the effect of the rate of emigration of highly
qualified.
The coefficient on education spending, it is negative
and statistically significant at 1 %. The estimates
reveal a negative relationship between skilled
migration rates and spending on education since an
increase of one percentage point would reduce
education spending in the skilled emigration rates of
2.64 percentage points.
Conclusions
Econometric tests appear increasingly precise through
the use of modern techniques adapted to panel data in
spite of a lack of available data. In this article, to look
for explanatory factors of skilled emigration rates in
the Caribbean, an attempt was made in the empirical
part, the estimated rates of skilled emigration. In
performing regressions conducted using panel data
over the period 1975-2008 and we include a set of
variables related to contextual issues of Caribbean
island territories for the full sample.
The main conclusions to be drawn from the
regressions are following:
An increase in education spending reduces the
proportion of skilled migrants outside the country of
origin. Efforts in public policy education seem
necessary and important for reducing the brain drain
and improving education. An increase in
unemployment and widespread access to education
contributes to a reduction in the rate of skilled
emigration. It can be a major obstacle to effective
growth.
The increase in GDP per capita has a positive effect
on skilled emigration rates in the Caribbean islands.
This result emphasizes the existence of a stylized fact
in the Caribbean island since it invalidates the theory.
This result may be argued by a psychological or
cultural unattachable aspect the economic point of
view. It is the belief of the population into a bright
future outside the Caribbean. After estimates panel
data tests, our researches could be oriented on an
empirical analysis of causality of the explanatory
factors mentioned. Its results could be done to guide
the establishment of mechanisms to stem the brain
drain in the Caribbean island.
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