Comments on the discussion paper on high skill migration by Michael Clemens

I had earlier summarized discussion paper on high skill migration by Michael Clemens I had just quoted relevant excerpts from the paper in the earlier blogpost, just to ensure that I don't misinterpret him. I also refrained from making my comments on the paper. Having said that, I have three comments/doubts on the paper and two ideas specific to India, which can be an interesting aspect to explore.

To provide a context to the comments, I was initially of the belief that one should let individuals pursue their interests and not restrict them from migrating and that instead of spending efforts to block people, governments should create conditions making it attractive to stay in their country of birth. 

This was until I saw this report which said that there are only 120 medical doctors in the entirety of Sierra Leone country. If there are only 120 medical doctors in the country, and if some of them decide to leave, should the country allow them considering the scarcity of doctors in the country? These doctors might be more productive abroad than being in Sierra Leone but in cases of scarcity, something is better than nothing. Is this a sound case for blocking migration? [Even if it is the case that there are more than 120 medical doctors in Sierra Leone, for argument sake, let us consider this as a hypothetical example.]

I will be using this example in the comments below. 

Comment 1: In the paper, number (proportion) of people with tertiary degree is considered as metric for skill stock. But not all those with tertiary degree have same amount of skill. I understand that measuring this skill through value added is difficult to measure, since the value added is also dependent on the environment the person is present in, but theoretically it would be different from the mere number of people with tertiary degrees. If we interpret skill stock in this manner, our inferences might also change. For example, consider this graph





The paper says "The overall height of the bar, light and dark, thus shows the hypothetical stock of tertiary graduates that each tercile would have if—somehow—all emigrants with tertiary degrees were suddenly obliged to return to their countries of birth". 

If we use skill value as new metric for all terciles, relatively the difference between developing countries and advanced economies might still remain large. But, bringing back one person isn't equivalent to an increase in number of workers by 1 because that person might have disproportionate skill which might actually be equivalent to many others. Thus when a person returns, the graph might have to be adjusted considering the skill value in new context. In the examples like Sierra Leone where there is scarcity, even small increases might matter a lot.

Comment 2: Aggregate effects of all sectors don't show the true picture. In the Sierra Leone's example, if the negative effects (if any) due to migration of doctors is offset by other professions, in terms of aggregate numbers, it doesn't mean much since the medical sector would still ailing. We might have to go for a sector specific approach, at least for some major sectors like engineering, research and medicine.

Comment 3: There is a time lag between migration today and its indirect effects through capital flows or increase in investments in education. In case of sectors like engineering, the immediate negative effects (if any) mightn't be a great deal but in case of extreme conditions like Sierra Leone, the absence of doctors can result in significant problems. So, in such cases, is it ok to restrict doctors, especially when their education is funded with scarce tax payers' money?


Ideas

Idea 1 - IT boom in India: I have personally witnessed indirect effects of migration. In early 2000s, during the IT boom in India, many of my acquaintances invested in computer science education with the hope of going abroad, and even have gone abroad and earned good amount of money, who then invested it back in India or returned to India and settled. It would be interesting to study this aspect, the benefits of migrant IT population from India. I am not sure if there is any study on this.

Idea 2 - Counterfactual of IIT graduates' migration: IITs are the premier engineering colleges in India around whom the major debate of migration generally is. It is difficult to estimate the counterfactual of, what would the migrant IIT graduates have done if weren't allowed to leave. One data set can help estimate this figure approximately.

In 2008, a study was commissioned by PanIIT (umbrella organization of IIT alumni) to estimate the impact of IIT alumni. This was conducted by Zinnov Management Consulting and India Brand Equity Foundation, a trust established by the Ministry of Commerce and Industry, Govt. of India partnered with PanIIT for this purpose. The report was released by the then Prime Minister of India, Dr. Manmohan Singh. The report found that 65% of IIT alumni are settled in India and the rest 35% are based abroad.

This report measures the economic impact using different metrics, each separately for alumni in India and those staying abroad. For example, the report says that
  • IIT alumni have helped generate, directly or indirectly, 15 to 19 million jobs over the last 50 years. On an average, an IIT Alumnus is associated with the creation of around 100 jobs. Close to 71% of the jobs generated, directly or indirectly, by IIT alumni are in India.
  • Average revenue responsibility per alumnus in India is close to USD 7 million, and for alumni outside India this figure is close to USD 14 million per alumnus, where revenue responsibility is defined as the overall revenue which IIT Alumni control or are responsible for across the globe in various roles.
  • IIT Alumni have been associated with incremental revenue addition to the tune of USD 200 billion over the last one year (2007). Overall, close to 50 per cent of the incremental revenue addition is accounted for by the alumni based in India. Incremental revenue addition is defined as the percentage increment of the revenue by the alumni in managerial positions is responsible for.
I am not sure how helpful this data set would be but I guess we can get some estimate of the effects of migration or the differential value creation of similar set of people but in different environments.

Finally, many thanks to Justin Sandefur for sharing Clemens' paper.

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