Managing the Effects of Skilled Emigration: Insights from the Philippines

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With recent migrant conflicts, such as those in the Middle East and South America, much public attention has been placed on immigration issues in reference to the refugees and asylum seekers that flee from such regions. However, little interest is placed on outward migration and its impacts on the origin countries. In 2019, the total number of international emigrants was 271.6 million, of which those originating from regions of conflict was 28.7 million. Therefore, the majority of emigration occurs for other push-pull reasons. Most sending regions are developing nations in Southern Asia, Latin America, and Sub-Saharan Africa. The resulting effects of emigration on developing countries will depend on the positive impact of feedback effects such as remittances and the effectiveness of policies in place which may offset the possible negative consequences. In this article, I will explore the various effects of skilled emigration and potential policies that can be implemented in response, with a close examination of this phenomenon in the Philippines.

Asia is the region with the largest negative net migration with a combined net annual average of 2.3 million people emigrating from their origin country. The largest sending countries in South Eastern Asia from 2000-2020 were China, the Philippines, and Myanmar – with annual averages of 372 000, 200 000, and 200 000. There has been historical concern about skilled emigration from developing countries and this phenomenon, in high levels, has the potential to slow economic (GDP) growth and detrimentally affect the population that remains – in ways such as but not limited to increased poverty and socio-economic inequality.

In the case of the Philippines, the country faces skilled emigration with little returns or foreign skills exchange on top of domestic labor shortages. That is, a “brain drain” is occurring, leaving behind less qualified and lower skilled workers, which may lead to certain industries suffering or the loss of foreign investment. The Philippines’ permanent emigrants gravitate towards North America, with 80% of total outflow being college educated workers. While many emigrants may choose to send money back to relatives in their country of origin, it is difficult to analyze the positive effects of remittances as they are often unknown or unreported. This is true for the Philippines but also other regions such as Argentina, South Africa, and Jamaica.

Education in the Philippines is globally responsive to labor trends and continues to produce more graduates, demonstrated in many IT educated workers. Although this increases the percentage of skilled workers in the labor force, unemployment rates in many local skilled fields remain high. This occurs because 39% of emigrants are professionals which therefore overshadows the change in domestic skill level. However, this may also be in part because of undeveloped industries domestically. For example, the IT industry has only begun to start up in the Philippines; therefore, many skilled workers searching for positions within the industry look overseas for better job prospects for their skill level. Nonetheless, there is hope of reverse migration as developed countries’ tertiary sectors grow in tandem with other complementary policies to offset the effects of a “brain drain” such as liberalization of financial markets, extensive regional cooperation, and increased broadband access.

The case study of the Philippines demonstrates the negative impact of excessive emigration from developing countries as it may lead to a brain drain effect and labor shortages, which in turn has the potential to reduce, if not stifle, economic growth.

On the other hand, there has been evidence to show that some level of emigration may be beneficial to the home country as it may stimulate citizens to pursue higher education in anticipation of acquiring work abroad. Therefore, this suggests that there is an optimal level of emigration that countries should try to meet; however, determining this exact value continues to be highly disputed. Nonetheless, this would also suggest that policy actions such as blocking emigration entirely would not be beneficial as it will deplete and disincentivize the level of skilled workers faster than they are generated.

Moreover, there may be positive impacts from emigration as well such as feedback effects that can generate positive economic outcomes. For example, if a developing country experiences high rates of return migration from temporary stays abroad, their domestic productivity should increase. However, this will vary across different developing countries and individuals’ personal circumstances.

One drawback of this assessment is that there is insufficient information about the remittance behaviors and feedback effects in developing countries. However, India poses as an exception, as there has been evidence of explicit links between remittances and investments by the highly educated emigrants in government made deposit schemes. However, these schemes would benefit from more extensive investment and their benefits would be complimented by the implementation of other policies.

Some policy suggestions can include recruitment policies to attract foreign workers to increase human capital. In many developing countries where many of their emigrants remain abroad, remittances are a significant source of income. Therefore, resourcing policies could be effective, examples include encouraging savings in foreign currency accounts of the home country, buying remittance-backed bonds, or introducing incentives such as reduced tariffs for increased entrepreneurial investment. As previously discussed, a significant reason why many nationals emigrate is to seek greater opportunities. Therefore, developing countries can implement long term policies to encourage labor retention through economic development – in other words, giving people a reason to stay, or return. In the short run, this may lead to increases in emigration; however, there has been evidence to suggest that in the long term this results in decreased wage differentials and skilled emigration in high levels.

To conclude, many developing countries face the problem of losing their educated workforce despite producing increasing number of highly skilled college graduates as a percentage of the labor population. Thus, developing countries should facilitate the inward movement of high skilled foreign workers, expatriates, while implementing complementary policies that offsets the negative effects of the brain drain effect and labor shortages.

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Managing the Effects of Skilled Emigration: Insights from the Philippines
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