“Diaspora and Development: Highly Skilled Migrants from East Asia”

Robert E. B. Lucas

IED Discussion Paper 120 November 2001

This paper distinguishes three major streams of international migration from East Asia: the first stream, to the Pacific rim OECD countries, is made up largely of highly qualified and well educated individuals; the second stream to the Middle East has included both unskilled and professional workers; and the third stream reflects a migration transition among the higher income economies of East Asia, some of which have become significant importers of low skill, temporary workers. In absolute terms, the out-migration of qualified individuals to North America and Australia is very large. By the year 2000, for example, there were an estimated 840 thousand college educated adults from the Philippines in the USA. Further, a large proportion of these individuals entered the US in the 1990s: between 1994 and 2000, there were an estimated 200 thousand college graduates who entered the USA from East Asia and up to 61 percent of East Asian adults in the USA in 2000 had attended college or graduate school. Lucas notes that for countries like the Philippines and Korea, these numbers constitute a significant proportion of their total stock of tertiary educated population.

Since studying abroad is the major vehicleof entry into the OECD countries, Lucas looks at attempts

made by somecountries to create an educational infrastructure that can keep skilled graduates at home. He notes that China, Korea, and India have consciously expanded graduate technical training during the 1990s as reflected in the fact these countries had more engineering doctorates in 1997 than the total earned by Asians in the US. Correspondingly, incentive schemes have been launched to encourage the return of the highly skilled diaspora. China, for example, has used a carrot-stick method to both encourage reentry and discourage permanent outflows.

Contrary to the traditional view, however, Lucas points out that a careful examination of data reveals increasing evidence that a highly skilled diaspora may play several important roles in promoting development in the home country. In some contexts, these benefits arise largely in the form of remittances. But Lucas argues that skilled emigrants are particularly well placed to enhance information flows, to lower reputation barriers, and to enforce contracts, with a result that highly skilled migrants may stimulate trade, investment and technology flows to their country of origin. Lucas concludes by highlighting the evidence with respect to these factors that appear to mitigate the brain drain effect - a high return rate of students to Japan and Korea, large remittances to the Philippines, brain circulation and technology transfer to Taiwan and Korea, and direct investments to China.