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News - Migration Management: Policy Responses to the Movement of Skilled Labour
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Migration Management: Policy Responses to the Movement of Skilled Labour

Introduction


In recent years, the migratory patterns of labour have become a growing concern of policy makers and development theorists as a perpetual “Brain Drain” is occurring in most developing countries. A Brain Drain refers to the sizeable loss of a nation’s highly skilled and educated labour to other countries.

Under the World Trade Organization (WTO), the increased liberalization of services will inevitably encourage increased international mobility of skilled labour. For the Caribbean Community (CARICOM), a brain drain is a major area of concern. To facilitate the creation of a single market and economy, the Revised Treaty of Chaguaramas provides for, inter alia, the removal of restrictions on the rights of establishment and the free movement of services and CARICOM nationals. In the initial stages, this free movement entailed the removal of work permits for University Graduates, Media Workers, Sports Persons, Musicians, Artists, Managers, Supervisors and other service providers. Therefore, there is a growing concern that these skilled persons will migrate from the Lesser Developed Countries within the region to the More Developed Countries.

 

 

Effects of a Brain Drain

 

According to modern growth and development theories, a brain drain can have significant implications on a country’s growth and development. These theories are based on the conjecture that there is a positive relationship between the average level of education and economic growth. Subsequently, developing a nation’s human capital assets can be a significant catalyst for economic growth and development. Significant losses of human capital can restrict a developing nation’s ability to grow and further widen the inequalities between developing and developed nations.

There are other direct costs of a brain drain which include the unrequited cost of training of skilled workers who emigrate. Governments invest significantly in the training and education of its people which is returned through their economic activity facilitated by their participation in the labour force. However, when workers emigrate, these returns are not fully realized unless the émigrés are drained from an excess supply of labour. The retraining of persons to compensate for the brain drain can become an additional cost which is exacerbated by the Learning curve effect given that members of the newly trained labour force take time to generate the same level of economic productivity as those that emigrated.

However, it is important to recognize that there are positive feedback effects of the emigration of a nation’s skilled labour. These benefits include:

  1. the monetary remittances from those abroad
  2. the technology and knowledge transfer facilitated through contact with expatriates overseas or return migration
  3. the demand for exports from expatriates overseas.


Consequently, some theorists argue that an initial brain drain can lead to a long-term ‘brain gain’. The challenge is to train an adequate number of skilled workers to meet local and external demand, thereby allowing the countries to offset the disadvantages of a brain drain and at the same time, allow them to capitalize on some of the benefits of exporting skilled labour. However, policymakers must exert some degree of caution when faced with a significant outflow of skilled labour because of its possible effects on current and future productivity.

 

 

Contributing Factors to a Brain Drain


The migration of skilled labour can be attributed to a number of factors such as

  • poor remuneration at home
  • bad working conditions (poor infrastructure, inadequate supplies, etc.)
  • limited opportunities for professional development at home
  • non-involvement in the decision-making process
  • lack of support and respect from supervisors/ authority
  • unstable economic climate
  • little job security

 

Policy Options


To effectively strategize to reduce or prevent a brain drain, it would be necessary to analyze the significance of each of these factors. After such analysis, there are many policy options defined by B. Lindsay Lovell of the International Labour Organization in the paper, Policy Responses To The International Mobility Of Skilled Labour, which can be explored as a means of managing the flow of migration and offsetting a brain drain including:

  1. Retention Policies
  2. Restriction Policies
  3. Resourcing Expatriates (Diaspora Options)
  4. Recruitment Policies
  5. Reparations

 

Retention Policies


Retention policies actively create incentives to deter the emigration of the skilled labour. This can involve increasing training and career development opportunities to deter those who emigrate for better training and education overseas. This policy dimension would therefore involve creating an environment that stimulates professional growth through the strengthening of domestic educational institutions and human resource development strategies. This approach promotes the accumulation of human capital. Additionally, as a strategy to minimize the negative effects of emigration and to maximize its benefits, it supports the development of a larger pool of excess skilled labour which will be trained to meet local demands and new external demand by international recruiters.

A retention policy can also seek to reduce the economic incentives of emigration such as better wages and working conditions. It therefore focuses on improving the social and economic conditions and addresses the structural and economic problems that led to the brain drain. Additionally, improving the economic conditions of the country can also attract skilled international migrants who can supplement the skill shortages which cannot be currently satisfied by local training.

The benefits of a retention policy may only be realized in the long term. In the short term, investments in education can unwittingly exacerbate the brain drain since nationals are better prepared to compete for higher paying jobs overseas. Additionally, by improving the economic conditions of a country, potential emigrants would be more prepared and able to afford and pursue overseas opportunities.

 

 

Restriction Policies


Restriction Policies create obstacles for nationals to seek employment overseas. These policies are largely imposed by receiving countries. For example, possible emigrants to the United States must apply for visas which are usually limited in number and issued on a temporary basis. However, it has been applied to help prevent the negative implications of the brain drain.

As a strategy to counteract a brain drain, a restriction policy usually involves quotas which restrict the number of emigrants. Another approach would be to attach a return conditionality on student loans granted to persons studying overseas. These persons are more likely to emigrate by staying in the country of study. Therefore, to ensure their return, the student loan agreements could include a legal restriction to return to Barbados and work for a period of time. The Student Revolving Loan Scheme of the Ministry of Education employs such a strategy. However, these agreements must be strongly enforced and heavily penalized if they are to be successful.

If this policy option is utilised, it must be flexible enough to allow some inward and outward migration from which the implementing country can benefit, while controlling the flow, to make the negative effects of migration more manageable.

Resourcing Expatriates (Diaspora Options)


This policy option involves creating links between the implementing countries and expatriates to facilitate knowledge transfer or local financial investment to offset the losses and disadvantages incurred from emigration. By using Diaspora options, the free movement of a country’s nationals will not be constrained and although there may be a temporary or permanent loss of skilled labour, the two-way linkages can be beneficial to the country.

With respect to the transfer of knowledge and technology, modern telecommunications and strong e-infrastructures can be used to create virtual links to expatriates in their countries via Diaspora networks. For example, local professionals can use the internet to communicate with expatriate professionals to exchange ideas and share experiences and therefore learn from each other. Today, online networks such as Facebook and My Space create great opportunities for such linkages.

With respect to remittances, the implementing country can make it easier and more affordable for expatriates to send monetary remittances to their local friends and family and the money will be reabsorbed into the economy through consumption. Remittances permit more expenditure on goods and services at home, therefore generating a multiplier effect on the country’s income.

Recruitment of International Migrants


The primary objective of a Recruitment policy is to offset the brain drain by focusing on developing a national competitive strategy for the recruitment of skilled labour internationally. This option is dominantly used by developed nations to fill skill gaps that may exist.

This policy response has the additional advantage of facilitating the transfer of knowledge and technology from experienced foreign skilled labour to nationals. However, if this approach is adopted, government-to-government consultation would best reduce the potential for exploitation of migrant workers who immigrate under such programmes.

Reparations for Loss of Human Capital


In debating the brain drain issue in international forums such as the United Nations, a popular recommendation was to impose a tax as reparations for the loss of human capital to the source country. There were two proposed tax structures where:

  1. The increased income of the expatriate would be taxed at a rate higher than the average income tax in the country of residence and the revenues will be shared between the sourcing and receiving country of the emigrants. Developing nations could then use the revenues in their development.
  2. The expatriate would be taxed at the normal rate of income tax. However, the receiving country of the emigrants will share the increase in income as a result of the contributions made by the expatriates.



This policy option has never been implemented because it has many shortcomings. First, it is difficult to estimate what size the tax should be. Second, the challenges of redistributing the revenues from such a tax may be too difficult and too controversial to address. However, under international law, a country may tax the income of expatriates abroad as long as they retain citizenship of said country. This may therefore involve restructuring tax regimes to levy taxes based on citizenship, as opposed to residency. This approach is legally acceptable and it does not involve the receiving countries.

Conclusion


Migration has always been a controversial issue. Migrant labour can both increase the competition in the labour markets of receiving countries and, for the source countries, lead to a brain drain. Some argue that the developed countries benefit more from the migration of other less developed countries’ skilled labour, thereby crippling their efforts to develop. However, it must be highlighted there is as much to gain as there is to lose with the exporting of skilled labour as some migration produces positive feedback effects which have contributed to the development of many countries. The challenge is to manage the migration to maximize the benefits and yet reduce and offset the negative consequences of such migration.

For Barbados, the high level of education creates the potential of a brain drain, which has already been seen in certain areas such as healthcare professionals (particularly doctors and nurses), teachers and qualified accounting professionals. Furthermore, with the free movement of skilled labour currently under the CSME, a brain drain becomes a greater possibility.

In migration management, there are a number of policy options to consider. In developing a migration management strategy, one must take into account each policy option’s advantages and shortcomings and consequently develop a mix of policy options that best addresses the situation that stimulated the brain drain. However, to develop an accurate focus for the migration strategy, it is necessary to develop a statistical framework to monitor the movements of skilled labour over time. Policy makers can therefore utilize this information to implement structured migration management programs that ensure that economic development is not compromised by any migration of skilled labour from their countries.


Published: Thursday, 15th May, 2008





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