BRAIN DRAIN

The parameters of the exodus


The brain drain from Europe is not a recent phenomenon. Favoured destination? The United States. Now, though, this outflow of human capital has become a more crucial problem in the light of our knowledge-based economy and the fact that these emigrants are the most valuable cogs in that economic machine. A review follows by researcher Ahmed Tritah, an economist at the French international economics research centre, the Centre d'Études Prospectives et d'Informations Internationales (CEPII), and author of a recent study on the subject(1).

How is the phenomenon of the brain drain to the United States evolving? Why is it more of a problem for certain Member States (such as the United Kingdom and Germany) and among certain specialists (such as engineers)? What attracts Europeans to the United States that they cannot find in Europe? And conversely, what cost/benefit does the United States derive from importing these workers and what is the impact on the ‘exporting' countries of the resulting impoverishment in human capital? To provide comprehensive answers to these questions, economist Ahmed Tritah sifted through a mass of American census statistics dating from 1980 to 2006. His study has highlighted the complexity of the problem and the number of parameters that need to be considered to analyse the problem in detail. His approach, spanning more than 20 years, has enabled him to redefine the underlying trend of migration from Europe to the other side of the Atlantic: "European emigrants represent a small share of their source country workingage population. However, starting from the 1990s and following the US dot-com bubble, this share is increasing," writes Tritah. He goes on to add that there is "a decreasing pattern of return migration for most countries."

Young and educated

And that's where the shoe pinches. European migrants tend to be young and highly educated, with a growing proportion of engineers, researchers and academics - in other words, people likely to work in innovation activities and to build the knowledge economy. In 2004, another researcher, Gilles Saint-Paul(2) (Center for Economic Policy Research- CEPR) already studied the brain drain among the highest skilled human resources. Back then he spotted an increasing number of university graduates among European emigrants. For example, between 1990 and 2000, the share of all expatriates from a single source country rose from 34.6 % to 41.9 % in the case of Germany, from 42.7 % to 56.1 % in France and from 17.1% to 25.7% in Italy A growing number of these emigrants also had a science doctorate. Obviously this brain drain signifies a major loss in view of the education effort made upstream by the Member States of origin, which had enabled the emigrants to become so highly skilled in the first place. Ahmed Tritah's detailed analysis of four American censuses between 1980 and 2006 has built an even clearer picture of the situation. He focuses on the European immigrant population aged between 25 and 64, deliberately excluding students who may be away from their homeland temporarily. In 2006, a total of 2.3 million Europeans in the 25-64 age bracket were living in the United States, that is to say 1.1% of the comparable population living in the European Union (a proportion calculated on the scale of EU-15 up to 2005). This overall rate has varied only slightly over the past 20 years. In fact, the pattern of human capital outflow has tended to differ from country to country in accordance with age and with skills - particularly since EU enlargement to 25 members and later to 27. More than half of the Europeans working in the USA are still traditionally from Britain or Germany (nearly 2% of the country's population) and their expatriation rate is still growing rapidly. The Italians, French and Spanish come next. Although France is seeing a significant rise in the number of its nationals opting to pursue their careers on the other side of the Atlantic (an increase of 77% in the 1996-2006 cohort compared with the 10-year period from 1981 to 1990), in Italy, where the expatriation rate has also increased, there has been a fall in the total number of nationals emigrating to the United States. The fact that Italian expatriates are comparatively older than their European counterparts goes some way to explaining this decrease. A larger number of Italian expatriates top the 65 year threshold, retirement age. This proves how important it is to analyse the brain drain phenomenon by cohort and not just globally.

Selectivity of knowledge

Over and beyond general human capital flows, Ahmed Tritah also stresses the ‘intensity' of the brain drain, in terms of the scale of emigration and quality of emigrants (qualifications, productivity, etc.) compared with the sourcecountry population. He points to what he terms the ‘selectivity' of emigration towards the United States. The censuses reveal that the expatriate population is on average younger and more educated than the source-country population. For many countries, the education level of these migrants was higher in 2006 than in 1980: "long-term trends in migrants' occupations reveal an increasing concentration in occupations that matter the most" for innovation, knowledge creation and knowledge transfer. The report goes on to say that, in these fields, "European researchers working in the United States are increasingly numerous compared with researchers based in Europe, in particular for the European countries where the population's average level of education is low". Based on an indicator that weights the years of study by their performance (i.e. their salary) in the source country, in 2006 the estimated outflow of European human capital to the United States represented between 0.2% and 0.6% of their source country's human capital. After a decline in the 1980s, this share increased in 1990s, reflecting a selection of emigrants higher up the labour productivity ladder. For instance, the Portuguese nationals who have settled in the United States have on average studied twice as many years as their compatriots, whereas expatriates from Germany, where it is customary to study for 14 years, tend to have studied a total of 15 years. The high skill level of expatriates is indicated by the size of their pay slips. "Expatriates earn a wage premium compared with a similarly observable US-born worker. This premium is higher for the more recent cohorts of migrants. This result is either an indication that Europeans are exceptional performers in the US labour market, or that they are working in leading sectors and occupations within their skill group, which places high value on unobservable human capital such as talent. I conclude from this empirical scrutiny that, starting from the US new-economy revival, we are witnessing a surge in the outflow which has lasted since then, of European human capital that matters the most in a knowledge economy."

What can Europe do about it?

What action can Europe take to counter this brain drain? An interesting finding is that, in the past 10 years, it is those countries that have increased their R&D spending the most that have experienced the lowest rates of expatriation to the United States. For instance, Denmark, which upped its research and development share of GDP spending by 0.6 points between 1995 and 2006, saw the number of its scientists leaving the country fall by 21 % after 2000. An average one GDP-point increase in the ratio of R&D spending to GDP reduces the flow of expatriates by 72 %. When the European Council launched the Lisbon Strategy in 2000, it urged Member States to step up the research share of GDP to 3% by the year 2010. There is still a long way to go, except in the Nordic countries, where Sweden had already exceeded the 3% target in 1995. Another question is how much time Europeans remain working in the United States. The profile of returns appears to have changed over time. Most of those who returned to their home country in the 1990s were older than those in the 1980s. This could indicate that emigrants invest their funds and energies heavily in the United States (by buying a house, or honing their language skills, for instance). There is also a difference in educational level between those (less skilled people) who return to their homeland and non-returners, as well as variations from one country to another. For instance, 50% of Scandinavians returned to their home countries in 2000, compared with only 20% of southern Europeans. Even though the brain drain is a small-scale phenomenon, the fact that Europe is exporting an ever larger share of increasingly skilled human capital to the United States is a source of concern.

Christine Rugemer

  1. The Brain drain between Knowledge-Based Economies, editions du CEPII, Paris, 2008.

  2. Gilles Saint-Paul, The Brain Drain, Some Evidence from European Expatriates in the US, CEPR, Discussion Paper Series n°4680, 2004.


TOP

Find out more