The Effects of International Scholarships and Grants on High Skilled Migration in Central Asia: Is it a Brain Drain, a Brain Gain or a Brain Circulation?

 

Motivation

The project is about the topic of high skilled migration and economic development caused by international scholarships and grants. The research questions are: What are the economic effects of high skilled migration? What are the driving forces behind it? How can it be quantified?

In this text the words “high skilled migration” instead of “brain drain” (Bhagwati et al. 1974) and “country or origin” instead of “sending or source country” is used.

The motivations to take Kyrgyzstan and Kazakhstan are personal experiences as a reviewer for scholarship programs and expert for study program accreditation in both countries and the fact that according to the World Economic Forum Kyrgyzstan is in the lowest percentile and Kazakhstan below the middle in the capacity to retain talent (World Economic Forum 2018).

It is planned to look at the phenomenon of high skilled migration connected to international scholarships or grants from an economic point of view, investigating the positive or negative externalities caused by this migration.

Theoretical background

Many countries intensify their efforts to attract and hold foreign students, which causes human capital externalities (Acemǒglu et al. 2000) in the countries of origin. Does the migration of talents therefore mean a gain or a loss or of human capital investment by a country?

A significant migration of high skilled migration has economic effects on the economy on the labor market and fiscal policy in the country of origin. It can be a severe drawback in a country’s effort to obtain human resources and fiscal revenues for economic development (Beine et al. 2008). But high skilled migration might have also positive externalities in countries of origin like stimulating education, remittances, network effects from expatriates and knowledge effects from returnees. (Boeri et al. 2012). Do specific trajectories of migration and development exist? Is development slowing down with high skilled emigration (skill-setting curve) or is high skilled emigration slowing down with development (migration-setting curve)? (De la Croix et al. 2012)

 

Is the actual incentive structure supporting or limiting student migration? By answering this question, a distinction has to be made between the incentives to study abroad and the incentives to return. What is the final destination after studying, the working destination? What factors might turn the decision to temporary emigrate for studying in a permanent emigration for working?

 

The effects of high skilled migration on countries of origin should be investigated by estimating human capital externalities and considering policy in countries of origin and destination. What are the private and social returns to higher education? The private returns include the impacts of an education level on an individual’s employment and income situation. The social returns or externalities are the impacts an individual’s education has on the society.

The standard solution from economic theory to solve the problem of negative externalities is internalizing it by regulation (caps), pricing (Pigouvian tax) or property rights (Coase theorem). To what extend are these solutions applied in the policy responses on high skilled emigration? What governmental and institutional arrangements exist, to reduce the negative externalities of high skilled migration and what incentives exist to encourage the positive ones?

The focus of this research will be on the effects of scholarships and grants. Are international scholarships a mean of labor policy (brain gain) or development policy (brain circulation)? Are they implemented to attract foreign talents to the own country or educate talents capital for a foreign country? What incentives are set to make the scholars return after studying abroad? What policy options might turn a brain drain into a brain circulation? What are the experiences of scholarship recipients?

Method

Basis should be a tracking study of scholarship holders from Kyrgyzstan and Kazakhstan containing a descriptive and analytical part. Data gathering should be in a mixed approach using the different lenses of the qualitative and quantitative approach. Both have advantages and disadvantages. In this case it might be useful to combine them and integrate qualitative elements in a quantitative study like carrying out a preliminary qualitative study to gain information about the context and to focus the question of the survey. In the quantitative part, it is intend to use census data and mico data.

 

References

Acemǒglu, D., Angrist J. (2000): How Large Are Human-Capital Externalities? Evidence from Compulsory Schooling Laws, NBER Macroeconomics Annual, 2000, pp. 9–59.

Beine M., Docquier F., Rapoport H. (2008): Brain drain and human capital formation in developing countries: winners and losers. Economic Journal, 2008, pp. 631–652.

Bhagwati, J., and Hamada K. (1974): The brain drain, international integration of markets for professionals and unemployment: A theoretical analysis. Journal of Development Economics, 1974, pp. 19–42.

Boeri T., Brücker H., Docquier F., Rapoport H. (2012). Brain Drain and Brain Gain: The Global Competition to Attract High-Skilled Migrants. Oxford University Press, 2012.

De la Croix, D., Docquier F. (2012): Do brain drain and poverty result from coordination failures? Journal of Economic Growth, 2012, pp. 1–26.

World Economic Forum 2018: Global Competitiveness Report 2018.