Avoid too much import of skilled human capital from poor countries!
February 6, 2024
Labor markets in less developed countries are frequently analyzed from different angles. Researchers put their emphasis often on institutional and physical working conditions, gender issues, child labor, (minimum) wages and wage disparities, social protection of workers, income distribution, energy and environment, workers’ health, ethics, labor market laws and rules (plus their enforcement and application), labor productivity, etc.
There exists also quite some literature about immigrant workers coming from the emerging world to Western countries. One special aspect, however, seems to be neglected by most analysts with nexus to migration issues: the increasing efforts by foreign (Western) politicians to attract skilled workers to their home countries.
The complicated issue of skilled worker immigration
We all know that the world has become tougher in recent years with extensive movements on global labor markets for various reasons – due to poverty, covid, dictatorship, persecution, and wars. All these developments are certainly disliked in advanced democratic countries – but many times politicians and voters want to see a visible downsizing of the unskilled labor force inflow from poor countries. Instead, they prefer a growing inflow of skilled workers from particularly Asia and Africa.
Whatever one may think about this less humanitarian positioning, there is at least some logic in it. First, Western institutions cannot cope with necessary immigration administration anymore. Second, politicians are often no longer capable to handle the protests from the extreme right. Third, the strong demographic changes with shrinking population in mostly mature countries – but also, for example, in China and Russia – has already led to serious shortages of skilled experts within the EU, particularly in Germany (“Fachkräftemangel”).
Regarding Europe, we can at least base a lot of labor knowledge on relatively reliable statistics. This is, however, mostly not the case when it comes to statistical developments on labor markets in emerging or really poor countries.
Not even China and India provide global analysts with sufficient labor market information. Sure, both countries have an enormous size which by definition makes the production of statistics very difficult. China, for example, measures therefore only urban unemployment. It has recently even stopped to announce the embarrassingly high youth unemployment. On the other hand one can read, for example, in newspapers and journals about the high unemployment of young Indian academics (https://www.linkedin.com/pulse/study-finds-42-gradsu-25-unemployed-upgradcampus-1c/).
Ethical shortcomings
Looking at labor market conditions in many economically lagging countries, I cannot find it very ethical that heads of governments and ministers from EU-countries and other advanced countries increasingly travel around in Africa, Asia and Latin America just to attract specialized labor force to their own advanced countries (or to find more suppliers of commodities).
This active way of marketing should be considered as in-acceptable. Unnecessary “brain drain” from emerging countries would be the consequence, hindering progress there both in the society and the economy.
As regards countries and companies in our part of the world, sales to emerging countries could or would develop less favorably because of the negative “brain drain”-effects on GDP than in a world without such a kind of human capital loss.
For this reason, Western governments should rather give skills to emerging countries than take too much of their precious human capital accumulation.
Hubert Fromlet Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board