International Migration of Labor as Brain Drain

International Migration of Labor as Brain Drain

Economic development is one of the major concerns of each and every government. Economic development shows the wellbeing of an economy. It can be measured through GDP growth rate. This study attempts to pore over the determinants of international migration of labor from Pakistan. Human Capital is the talented labor force of any economy which contributes in the process of production and boosts economic value, when this professional labor force migrates from one country to any other country is known as Human Capital Flight or Brain Drain (Johnson, 1979). Human capital Flight is studied same as Capital Flight, because both show economic loss of a country (Johnson, 1979 and Nadeem-ul-haq, 2005). Brain drain is important to study because economic growth is reliant on the productivity of its labor force so, this implies that higher output will be produced by more skilled labor. According to most of the studies, authors have put great emphasis on the fact that brain drain has an impact on economic growth because human capital is one of the important determinants of economic growth (Addleton, 1984, Lowell, 2001 and Checchi et al, 2007).This study is carried out in order to study the determinants of migration. Generally migrants flow from developing nations to developed nations in order to seek out better economic opportunities (Johnson, 1979 and Ray, 1971).In order to find out the impact of brain drain; it is important to ponder on its determinants. According to Pakistan economic and social review, (2008), salary differential, unemployment, low living standard and some non-economic factors such as war, inequality and political instability are the main factors which induce people to migrate from one region to another region, and these factors are mentioned as push factors. Economic factors like; Political freedom, economic opportunities, higher incomes are deemed as pull factors, which attract people to migrate. This theory is called Push-Pull theory of migration (Ahmed et al, 2008). Not only this study find unemployment and wage differentials as significant determinants but also another study finds out direct relationship between unemployment and brain drain (Ray, 1971). The study by Indian author Kamalesh Ray further point out that unemployment and Brain drain are common difficulty face by every developing economy and both problems involuntarily co-exist with each other. Unemployment and Brain drain presage the common dilemma; that is incompetence of a developing nation in fully utilizing their human capital. Ray's study focused on the point that countries like USA and other developed nations who spend a massive amount on Research and Development absorbs the skilled labor of developing nation by offering them better economic opportunities and ten times higher salary from the home country. This is proved significant from different study that these developed nations attract especially skilled labor force like Doctors, Engineers and Scientists from developing nations in order to make use of their capabilities and benefit their economy. This is lacking in developing nation like India and Pakistan, they don't lay emphasis on research and development and due to this inadequacy they are not able to create job opportunities and absorb their skilled labor force. This lack of job opportunities gives rise to unemployment rate and urges labor force to migrate towards developed nations (Johnson, 1979, Ray, 1971 and Nadeem-ul-haq, 2005).When some portion of skilled labor force migrate to different regions, it creates inequality in home country due to higher wages paid to remaining skilled labor force and low wages to unskilled workers (Lowell, 2001). This human capital flight implies that usually skilled labor force has more adverse impact on economic development of a country instead unskilled workers, they impact economic growth by creating inequality, lack of professional workers in both public and private sectors, decreasing countries economic output and avoiding taxes etc (Johnson,1979). All available literature has the same opinion that by reason of human capital flight economic growth lags behind in developing countries. The country cannot excel without its skilled labor which is an important positive feature of an economy but on the other hand migration shows various beneficial impacts on economic growth as well. From research it has been found that there is excess supply of labor in developing countries and shortage of labor in developed countries, this space is filled by migration in both countries which is beneficial as well with respect to different aspects. Excess supply increases