High Skilled Migration from India, 1991-2007, An Analysis of Its Economic Implications
MetadataShow full item record
The world economy is characterized by a very high level of integration. This integration or globalization as it is more popularly known is to a large extent contributed by increased trade in commodities, services, capital and indeed in movement of natural persons across nations of the world. According to the International Organization of Migration (2008), there are more than 200 million migrants around the world today and there is enough evidence to show that the rate of international migration has actually increased at a time when the world is getting more globalised. The total number of citizens that have emigrated from India is about 10 million (World Bank (2008). At this number it works out to just about a per cent of her population. India is one of those countries from where the migration rate of high skilled migrants has always been much higher than the total migration rate. For instance in 1990, the total migration rate for all education groups was 0.2 per cent. This has since increased marginally to 0.3 per cent in 2000. In the case of high skilled migrants (defined as those with at least tertiary education) was 2.6 per cent and 4.2 per cent in 1990 and 2000 respectively. The routes through which high skilled and low skilled migration takes place differ widely. In the case of high skilled migration there are two routes: first education related and the second the employment related. In the case of low skilled migration, there is however, only one route namely the employment related route. Regarding high skilled migration the traditional route of migration has been the education route. Indian students go abroad for higher studies and then remain back in the host country by taking up employment. This route has now become more pronounced with more and more students going abroad for higher studies. Although we do not have good quality quantitative numbers on the number of students who have gone abroad for higher studies this trend can be indirectly gleaned through the education related travel in the current account of India's BoP tables: this used to be only about on an average about US $ 60 million per annum during the 1990s, but this has since increased to about US $ 1 billion during the period since 2000 and has touched very nearly $ 3 billion in 2007-08. This traditional route has been supplemented with employment related emigration. The growing globalization of the world economy in general and the growing competence of India in certain areas of technical skills such as those related to Information Technology (IT) has meant that Indian citizens with these skills are much in demand in the labour markets of especially Western countries. This increased high skilled migration from India has at least two major implications. First the high skilled migration has resulted in larger amount of remittances: India is now the largest remittance receiving country in the world. Although during the period up to the mid 1990s, the source of this remittances were largely the result of low skilled migration to the middle east, since that period nearly half of the remittances are emanating from the US alone and it is not difficult to argue that this trend in the shift in source is very much tied to high skilled migration. The availability of these remittances has helped the country to reduce its deficits in the current account of its Balance of Payments even if these remittances have not always found expression in productive investments in the home economy. Further the increased consumption smoothening that these remittances have contributed to have had a positive effect in spurring and maintaining the high growth performance of her services sector. The second implication is that it has had a deleterious consequence on the supply of high skilled personnel especially for R&D: in fact India has one of the lowest densities of scientists and engineers engaged in R&D. Although there are quantitative evidences (based on an analysis of both input and output indicators of innovation) to show that India has become significantly more innovative in the period since 1991, her ability to sustain and improve this performance crucially depend on the availability of highly skilled manpower of certain acceptable quality. Although a small number of such manpower is turned out by the higher education system, they do not find an expression in the core human resource on science and technology and part of this "lack of expression" may be attributed to the increased high skilled migration. The current thinking in the development circles is that governments of sending countries ought to be taking advantage of high skilled migration for their economies rather than put hurdles in the way of such migration. The term "brain drain" is increasingly replaced with "brain circulation". There are many instances of these high skilled migrants contributing to the well being of their home countries by providing information on markets and technology and indeed in facilitating the supply of risk capital such as venture capital which then can be used for establishing technology-oriented ventures in their home countries. The purpose of the paper is thus first to quantify the extent of high skilled migration from India and then to distil out two of its economic implications to her home economy. The paper thus has important policy implications for the country to benefit from this apparent leakages in one of her key resources.