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Must Skilled Migration Be a Brain Drain? Evidence from the Indian Software Industry

Author

Listed:
  • Commander, Simon

    (IE Business School, Altura Partners)

  • Chanda, Rupa

    (IIM)

  • Kangasniemi, Mari

    (Labour Institute for Economic Research)

  • Winters, L. Alan

    (University of Sussex)

Abstract

We provide a first empirical attempt at understanding the scale and type of skilled migration from the Indian software sector and the consequences for firms experiencing loss of skilled workers. The paper draws on some unique survey evidence of software firms in India. The results are not generally consistent with an adverse or brain drain story but provide a more nuanced interpretation. Not only has skilled migration taken a variety of firms – including significant temporary migration – but the evidence suggests that the impact of mobility on performance in the sending firms has not been unambiguously adverse. There is some evidence of associated wage pressure at the height of the software boom in the late 1990s. But there is also evidence of a strong supply side response as workers acquired training and entered the sector.

Suggested Citation

  • Commander, Simon & Chanda, Rupa & Kangasniemi, Mari & Winters, L. Alan, 2004. "Must Skilled Migration Be a Brain Drain? Evidence from the Indian Software Industry," IZA Discussion Papers 1422, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1422
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    References listed on IDEAS

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    1. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
    2. Michel Beine & Frédéric Docquier & Hillel Rapoport, 2002. "Brain Drain and LDCs' Growth: Winners and Losers," Working Papers 2002-08, Bar-Ilan University, Department of Economics.
    3. Mr. William Carrington & Ms. Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 1998/102, International Monetary Fund.
    4. Donald R. Davis & David E. Weinstein, 2002. "Technological Superiority and the Losses from Migration," NBER Working Papers 8971, National Bureau of Economic Research, Inc.
    5. Bhagwati, Jagdish & Hamada, Koichi, 1974. "The brain drain, international integration of markets for professionals and unemployment : A theoretical analysis," Journal of Development Economics, Elsevier, vol. 1(1), pages 19-42, April.
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    Cited by:

    1. Beine, Michel & Docquier, Frédéric & Oden-Defoort, Cecily, 2011. "A Panel Data Analysis of the Brain Gain," World Development, Elsevier, vol. 39(4), pages 523-532, April.
    2. Di Maria, Corrado & Lazarova, Emiliya A., 2012. "Migration, Human Capital Formation, and Growth: An Empirical Investigation," World Development, Elsevier, vol. 40(5), pages 938-955.
    3. repec:ilo:ilowps:486369 is not listed on IDEAS
    4. repec:ilo:ilowps:486992 is not listed on IDEAS
    5. Michael A. Clemens & Lant Pritchett, 2008. "Income per Natural: Measuring Development for People Rather Than Places," Population and Development Review, The Population Council, Inc., vol. 34(3), pages 395-434, September.
    6. Clemens, Michael A., 2009. "Skill Flow: A Fundamental Reconsideration of Skilled-Worker Mobility and Development," MPRA Paper 19186, University Library of Munich, Germany.
    7. Peter Simmons & Yuanyuan Xie, 2013. "Three musketeers: A dynamic model of capital inflow (FDI), the real wage rate and the net migration flow with empirical application," Discussion Papers 13/28, Department of Economics, University of York.
    8. Tüzin Baycan & Peter Nijkamp, 2012. "The Migration–Development Nexus: New Perspectives and Challenges," Chapters, in: Roberta Capello & Tomaz Ponce Dentinho (ed.), Globalization Trends and Regional Development, chapter 8, Edward Elgar Publishing.
    9. Kugler, Maurice & Rapoport, Hillel, 2007. "International labor and capital flows: Complements or substitutes?," Economics Letters, Elsevier, vol. 94(2), pages 155-162, February.
    10. Docquier, Frédéric & Faye, Ousmane & Pestieau, Pierre, 2008. "Is migration a good substitute for education subsidies?," Journal of Development Economics, Elsevier, vol. 86(2), pages 263-276, June.
    11. Karin Mayr & Giovanni Peri, 2008. "Return Migration as a Channel of Brain Gain," NBER Working Papers 14039, National Bureau of Economic Research, Inc.
    12. Makulec, Agnieszka., 2014. "Philippines' bilateral labour arrangements on health-care professional migration : in search of meaning," ILO Working Papers 994869923402676, International Labour Organization.
    13. Hart, David M., 2006. "Managing the global talent pool: Sovereignty, treaty, and intergovernmental networks," Technology in Society, Elsevier, vol. 28(4), pages 421-434.
    14. Sonia Plaza, 2013. "Diaspora resources and policies," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 27, pages 505-529, Edward Elgar Publishing.
    15. Seema Sangita, 2013. "The Effect of Diasporic Business Networks on International Trade Flows," Review of International Economics, Wiley Blackwell, vol. 21(2), pages 266-280, May.

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    More about this item

    Keywords

    skilled migration; brain drain; software;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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