Thursday, March 28, 2013

Taking Part In The Brain Drain

I’ve always thought of the “brain drain” in primarily economic terms. Because of national and social barriers to labour mobility as well as search frictions for both employers and employees, earnings across countries vary widely even within the same industries.

Wages depend more on national level demand and supply, and international arbitrage of wages is at best imperfect. It’s easier for some companies to pull up sticks than to shift labour around the globe to where its needed.

But for some industries, such as primary industries or personal care, that’s simply not possible. That implies that overall global welfare can be improved if we can improve labour mobility, raising supply where demand is the highest.

In that spirit, here’s the BBC’s attempt at reducing search friction (excerpt):

Global migrants: Which are the most wanted professions?

Around the world, there are a number of professions in high demand for the pool of 200 million international migrants.

The need for nurses and doctors is perhaps the best known, but there are also countries short of chefs, in for example Belgium and the UK.

And psychologists looking for a change of scene could try the Nordic countries, where they are in demand in many of whom

Use the interactive guide below to explore the top 20 most wanted professionals and the countries that want their skills. You can also read case studies of professionals who have made the move to another country.


  1. "That implies that overall global welfare can be improved if we can improve labour mobility, raising supply where demand is the highest."

    An overview of the literature suggests that an appropriate ballpark estimate of the improvement to overall global welfare would be a doubling of world GDP:

    1. For some reason the link doesn't show up right, let's try again:

    2. Thanks John. I didn't realise the potential gains were so large.

    3. Yeah, I don't think many economists do. After looking at those numbers, the immigration status quo in most countries just seems completely unacceptable.

      Clemens and his colleagues also have some interesting work on wage discrimination: "for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination, typically much larger than wage discrimination based on ethnic group or gender within spatially integrated labor markets".

      The full paper is worth reading. They do all sorts of comparisons to test their conclusions. Footnote 51 even digresses into a discussion of how the wage gaps that exist today are larger than the compensation gaps which existed because of human slavery in the antebellum US.

  2. This is completely off topic (will put in my 2 cents later)...

    Check out IMF's new anti-subsidy rhetoric

    the related paper and articles are also quite good, btw.


    Almost makes me ashamed that I will be pumping a full tank of RON95 in my car later.

    1. Thanks Jason, I'll post on that later if I have the time.