There is a flipside to moving abroad for work or retirement, and that flipside is the negative affect it can have on an expat’s home country. The term brain drain is used to describe the impact human capital leaving a country has on its economy. If many people in a country feel they have no job opportunities locally, they will immigrate to another country with a stronger economy and work there. The long term result is that all those people leaving for better opportunities are an enormous loss for the originating country.
The expat’s home country has spent a great deal of money educating this person, and the person promptly leaves for a foreign economy. He or she will probably send back some money in remunerations to his or her family, but it won’t make up for the loss of tax revenue or economic opportunities that might have resulted if that expat had stayed home. Many countries seem to be locked into a permanent cycle of exporting their best and brightest citizens abroad to never return again.
The beneficiaries of all this expat labor are the wealthiest countries, particularly in Europe and North America. But they suffer too as their citizens who are not educated enough or competitive enough will find it hard to keep employed. There is a direct correlation between immigrant labor and a permanent underclass in a country. Any sensible business will choose the cheap hardworking immigrant labor over the pricey not as hard working local labor. And this isn’t just an issue for unskilled jobs. Any job that requires use of a computer is in danger of having it filled by a hard working immigrant.
So what does this all mean for expats?
I am not the only one aware of the issues expats generate in terms of brain drain and intensified competition for jobs. Governments and people everywhere are too. Governments react periodically to expats with heightened immigration restrictions. In a recession one of the first ways a government tries to placate the populace is by restricting immigration. Fewer jobs means more competition, and citizens will demand that expats be restricted from employment. It’s only when times are good that expats have an abundance of opportunities. When times are bad, expats lose out.
I have yet to see any substantial restrictions for expat retirees. I believe that countries that have retirement visa programs will continue to see expat retirees as a source of revenue. Since many retirement visa programs require an expat to have purchased private health insurance, the countries with these programs are not required to pay for the health issues of these expats. It’s a win win situation, and one I don’t expect to change in the near term.
For working expats, the issues are quite different. A working expat is really seen as an immigrant, and often a nuisance, particularly when times are bad. While companies will continue to see expats as the answer to many of their problems, governments will restrict them whenever there is a market downturn. A working expat should keep abreast of government policies regarding immigration whenever possible. It is also common for a change of government to mean restrictions on immigration as it is a common platform that politicians run on to gain office.
But back to brain drain. Too often the discussion of moving to work or retire abroad is seen from the point of view of the expat, rather than his or her impact on the societies around them. The mass movement of peoples for commerce and job opportunities is one of the defining issues of our time. In an era that continues to advocate unbridled capitalism and the opening of borders to allow for the rise of multinational corporations, immigration and expat work opportunities will always be a significant issue. There are no easy answers for what to do to give people the opportunity to live and work abroad while reducing the damage these same people make when they leave home permanently. As long as their remain great disparities in opportunities from country to country, there will always be expats, and there will always be issues stemming from brain drain.
