International student-migrant flows and growth in low- and middle-income countries: brain gain or brain drain?

ABSTRACT

The number of students flowing from low-income countries to high-income countries has grown over the past several decades but is likely to fall substantially in the coming years due to the coronavirus pandemic. To gauge the potential impact of the coronavirus-induced reduction in the international flow of student migrants, we estimate the pre-pandemic effects of student migration from 122 low- and middle-income countries to French- and English-speaking high-income countries on the economic growth of the sending countries. Using region fixed-effects and instrumental-variables estimators to address the potential endogeneity of student-migrant flows, we find positive and statistically significant effects of student migration on per capita GDP in sending countries. These findings are robust to different time lags, and are increasing over time. Our results indicate that student migrants have a modest but meaningful impact on the short-run economic growth of their home countries. In terms of the mechanisms through which student-migrant flows can affect growth of the home countries, we find evidence of ‘incentive effects’ for students going to English-speaking countries, and evidence of student-migrant flows affecting interest in politics and democratic political systems in the sending countries.

KEYWORDS:

• Brain drain
• brain gain
• international migration
• education
• GDP growth

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Migrants also send remittances home and these remittances can be a substantial percentage of a countries GDP. We do not expect that students will send home remittances so we do not focus on that here. See Lim and Basnet (2017) and references therein for further discussion.

² http://info.worldbank.org/governance/wgi/#home

³ https://www.iie.org/Research-and-Insights/Open-Doors/Data/International-Students/Enrolment

⁴ Definition of expected school life from UNESCO, 2009 (http://uis.unesco.org/en/glossary-term/school-life-expectancy).

⁵ The wording of the question related to interest in politics is: ‘How interested would you say you are in politics?’

⁶ The wording of the question related to democratic systems is: ‘Would you say “Having a democratic political system” is a very good, fairly good, fairly bad, or very bad way of governing this country?’

⁷ Although a country-level fixed effects specification can reduce the bias on ß1 and ß2, it does not allow us to control for the endogeneity of our independent variables of interest caused by reverse causality. Further, given that country fixed-effects models only capture time-invariant factors specific to each country, and given that our data span a large period of time (from 2000 to 2012), it is likely that several countries have experienced time-varying changes such as political regime changes. Therefore, a country-level fixed-effects specification is not suitable for the estimation of model (1).