Migration, Remittances and African Human Capital Development

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Migration, Remittances and African Human Capital
Development

• Yaw Nyarko
• New York University
• for
• African Economic Conference
• Addis Ababa 2009

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Acknowledgements

• Based on prior work (especially with W. Easterly)
• EU Economic Report on Development (Giorgia
  Giovanetti).
• Also builds on NBER Africa Project.
• Large literature today on the subject.
• WORK IN PROGRESS COMMENTS WELCOME.

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Main Message

• Education Important but low levels in SSA
• Diaspora and Brain Circulation important.
• Some NPV computations
• Implications for Policy in the Financial Crisis.
• The Bigger Issue Human Capital Dev.

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Top Brain Drain Countries
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Skilled Migration
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HIGH SKILLED EMIGRANTS AND STOCK IN COUNTRY
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HIGH SKILLED EMIGRANTS AND STOCK IN COUNTRY
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Skilled Labor Important for Growth

• Benhabib and Spiegel (2000)
• Many other endogenous and other Growth Models.

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• Nobody Cares about Drained Economists
• so .

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Doctors
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The Basic Argument

• Look at Costs and Benefits of the Brain Drain and
  quantify them.
• Net Present Value computations generally positive
  for higher education.
• Two Lotteries.
• Huge potential now and in Future to use to
  generate Economic Growth.

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A Macro Computation

• Cost of Tertiary Education, - C
• UNESCO data 2 x GDP per cap per year?
• Educated who Stay
• Wage Premium Use Household Survey Data W
  (3) - W (2)
• Educated Who Drain Rates of Drainage d
  (Marfouk et. Al.)
• Remittances and decomposition into different
  educational classes R
• Drainers Who Return
• Probability of Return ? (Survey and Census
  Data) 50? 30?
• Premium on Returned Drainers, Q

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Net Present Value Computation

• NPV(r) - C
• (1-d) W (3)
• d (1 ? ) R
• d ? Q
• - W (2)

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Expanding Education

• Use computations as basis of financing schemes
  for Educational establishments.

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Expanding Education

• Use computations as basis of financing schemes
  for Educational establishments.
• Update Kwame Nkrumahs Universal Primary
  Education goals to Tertiary?
• (Grey-haired peace corps?)

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The EU Blue Card
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The Blues versus Greens

• Opportunities for Africa?
• What is the marginal Impact?
• How well will Sub-Saharan Africans compete?
• Anti-Brain Drain Clauses?
• Impact of Financial Crisis.

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• UNSKILLED LABOR?

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Large Unskilled Emigrants
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Policy Prescriptions
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Policy Prescriptions

• Exotic Financial Instruments (Student loans?)

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Policy Prescriptions

• Exotic Financial Instruments (Student loans)
• Fund IOM Sabbaticals Program

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Policy Prescriptions

• Exotic Financial Instruments (Student loans)
• Fund IOM Sabbaticals Program
• Bhagwati Grey-Haired Peace Corps.

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Policy Prescriptions

• Exotic Financial Instruments (Student loans)
• Fund IOM Sabbaticals Program
• Bhagwati Grey-Haired Peace Corps.
• Migration Contracts

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How about the Unskilled?

• WARNING Africas population will soon double
  and will become younger!
• Educate them!

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• To my Right-Wing Czech friend

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Migrations

• The Mother of all Migrations East African Rift
  Valley

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Migrations

• The Mother of all Migrations East African Rift
  Valley
• European Explorations in the 1500s

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Migrations

• The Mother of all Migrations East African Rift
  Valley
• European Explorations in the 1500s
• Slavery

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Migrations

• The Mother of all Migrations East African Rift
  Valley
• European Explorations in the 1500s
• Slavery
• Jacobus Capitein of Elmina in 1735 (Univ. of
  Leiden?)

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Migrations

• The Mother of all Migrations East African Rift
  Valley
• European Explorations in the 1500s
• Slavery
• Jacobus Capitein of Elmina in 1735 (Univ. of
  Leiden?)
• Fourah Bay College, Sierra Leone (1827)

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• THANKS

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