Free Essay

Human Capital Flight

In: Social Issues

Submitted By areumni
Words 958
Pages 4
Migration of workers is indications of social, economic, political and environmental problems. High rates of unemployment, low wages, and poor working conditions are symptoms of an imbalance in the labour market that is prevalent in troubled economies. International migration of workers can be a short term benefit for the sending countries as it can help reduce poverty and increase economic growth. However, the long term consequences of a net outflow of skilled workers should be a concern as it deprives a developing country of its value asset of human capital. This can cause a deficiency in services in education, health care and economic productivity. Foreign remittances are very important income sources that contribute to a nation’s GDP and provide resources for families back home but does this justify the long term harm that losing human capital will do to the economical developments?

One major problem preventing undeveloped countries from advancing is their human capital deficiency. What is contributing to this continual deficiency is the migration of skilled workers who leave their home country to worker abroad. This phenomenon has been a long existing problem which economist have termed “brain drain”. The depressing reality that is the impetus for this “brain drain” is the simple fact that local jobs cannot satisfy the higher salaries that these skill workers demand. Talented workers with years of experience migrate to better paying jobs abroad and their positions simply cannot be filled by new graduates entering the work force. Furthermore, new graduates with little work experience are sometimes lured away also by the prospect of better paying jobs that may be underutilizing their education. The human flight does irreversible harm to the local exporting country because its economy cannot flourish with just unskilled workers. The investment in education and vocational training is an enormous monetary burden for the government which is wasted every time a skilled worker is poached by a foreign employer to worker abroad. The talent gap caused by migrations of professional and skilled workers becomes a void in the local economy that keeps it from taking flight. The country suffering from brain drain will find itself uncompetitive against neigbouring countries. Apart from the economic devastation, this brain drain also adversely impacts the welfare of the remaining citizens. Some of the highly sought after migrant workers are healthcare professionals whose exodus is causing a deteriorating healthcare system in their own country. Along with healthcare, schools, airlines, businesses, and the financial system of a country are all depressed.
A second problem from the migration of professional and skilled workers is the breakdown of the traditional family structure. There is an underappreciated social problem of entire generations of children who will grow up without one or both parents present. Studies have shown that children from single families are six times more likely to be poor and they are more likely to be poor longer. (Whitehead) Children growing up without duel parent guidance are more prone to having social deficiency. A 1988 survey by the National Center for Health Statistics found children without two-parent families are two to three times more likely to have emotional and behavioural problems. The lack of family supervision contributes to violent crimes. Numerous studies find single parent homes are significantly more likely to have children who commit crimes. (Mackey) Therefore, migrant workers create broken families that contribute to a breakdown of society.
In underdeveloped countries, foreign remittances are very important income source and provide short term benefits for the country. Migrant workers will sacrifice and leave their family to work abroad to earn a higher income so they can provide resources for families at home. There is definitely a short term benefit that raises their living standards and probably generates savings for investment and subsequent economic growth. The foreign countries remittances are a valuable contribution to the GDP in developing countries. It alleviates the pressure for local governments to create jobs for the unemployed and the establishment of welfare programs for the poor. The infusion of currency increases the consumption power o f the economy which helps local businesses. It is estimated that nearly US$500 billion in hard currency are remitted back to developing-nation by their workers around the globe each year to support banks, fills government coffers and boosts sectors such as telecommunications, retail, transportation and real estate. It is easy to see this trend of shipping out their citizens to work abroad has become a dangerous and unconscionable addiction for these countries. Leaders of these countries find this to be much simpler than to take on vested interests and generate opportunities at home. Even though there is a short term gain from receiving foreign remittance from their migrate workers, the long term damage that this gap in human capital creates in their own country shackles their economy to being a third world country.
The time to act is now for those leaders who want to break this vicious circle of dependences on foreign remittance to maintain their economy. Efforts must be made to create higher paying jobs so professionals and skill workers do not need to search for work abroad to help provide for their families. Higher paying jobs will elevate the living standards of the country and keep the brightest and most skilled workers from taking their talents elsewhere. For leaders who care for their country and its citizens, it is time to take action to keep families together and keep your professionals and experienced workers so they can help build the infrastructure that will allow your country to compete globally.

http://www.dikseo.teimes.gr/spoudastirio/E-NOTES/S/SingleParent_Families_Viewpoints.pdf http://gulfnews.com/opinions/columnists/torture-is-the-result-of-exporting-people-1.1285910 http://www.oecd.org/dac/povertyreduction/43280513.pdf

Similar Documents

Free Essay

Brain Drain

...The migration of skilled individuals to other nations is referred as the brain drain or the human capital flight. This migration of talented individuals may be due to conflicts, lack of opportunity, or health hazards where they are living. In India, brain drain is more because educated individuals are emigrating for higher wages and better opportunities. It has been in our consciousness since 30 years and many bright youngsters have emigrated mainly to US from early 1960s onwards including a large fraction of the graduating class at IITs in India. Advantages The money the emigrants have sent back home has helped in alleviating poverty in their homes. It has resulted in less child labor, greater child schooling, more hours worked in self-employment and a higher rate of people starting capital intensive enterprises. The money remittances have also reduced the level and severity of poverty. Moreover, the money migrants sent back are spent more in investments such as education, health and housing, rather than on food and other goods. Disadvantages Due to the influence of brain drain, the investment in higher education is lost as the highly educated person leaves India and becomes an asset to other country. Also, whatever social capital the individual has been a part of is reduced by his or her departure. With all the college graduates leaving their homelands, it raises the question as to whether their skills are being put to good use in the destination country.......

Words: 412 - Pages: 2

Free Essay

Human Capital

...WHY IS THE HUMAN CAPITAL SO IMPORTANT FOR THE ECONOMIC DEVELOPMENT OF MAURITIUS? Introduction This assignment aims to look at the special importance of human capital to the economy of Mauritius. First, we go about defining the concept of human capital. Afterwards, there will be a section which talks a bit about the history of the economy of Mauritius. Then we will move on to another section which tries to explore the different factors as to why and how human capital is important to Mauritius. We will then have a concluding remark. We will end by some possible recommendations.   What is human capital? Adam Smith defined human capital as follows: “Fourthly, of Justin Slay’s types of capital which is of the acquired and useful abilities of all the inhabitants or members of the education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense which certainly repays afterwards. The use of the term in the modern neoclassical economic literature dates back to Jacob Mincer's article "Investment in Human Capital and Personal Income Distribution" in the Journal of Political Economy in 1958. Theorists......

Words: 4728 - Pages: 19

Free Essay

Human Capital

...Advancing Australia’s ‘Human Capital Agenda’( Gary Banks Chairman, Productivity Commission Introduction It is a privilege to have been invited to give the fourth Lecture in this annual series in honour of Ian Little. Ian was a passionate advocate for good public policy and for reform — within his own state and nationally. This was grounded in an equally strong attachment to good analysis and evidence in support of policy decisions. As Secretary of the Victorian Treasury, he championed the use of quantitative analysis, including the development of an input/output based model of the Victorian economy, to gain a better understanding of the effects of policy changes on different industries and on the State’s overall economic performance. It was under his and John Brumby’s stewardship of the Treasury portfolio that the Victorian Competition and Efficiency Commission was established, to provide rigorous arms-length analysis and advice on key policy issues affecting the welfare of Victorians (akin to the role of the Productivity Commission at the national level). Victoria’s more systematic attention to good analysis and policy innovation commenced in the 1990s. It has yielded considerable benefits for Victoria’s citizens since then, not only in the comparative economic performance of this State, but also in its achievements in the social and environmental domains. Victoria was a first mover in the ‘second wave’ of economic reforms in the 90s — reforms......

Words: 6958 - Pages: 28

Premium Essay

Advances in Developing Hr

...Advances in Developing Human Resources http://adh.sagepub.com/ National Human Resource Development: What in the World Is It? Gary N. McLean Advances in Developing Human Resources 2004 6: 269 DOI: 10.1177/1523422304266086 The online version of this article can be found at: http://adh.sagepub.com/content/6/3/269 Published by: http://www.sagepublications.com On behalf of: Academy of Human Resource Development Additional services and information for Advances in Developing Human Resources can be found at: Email Alerts: http://adh.sagepub.com/cgi/alerts Subscriptions: http://adh.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav Citations: http://adh.sagepub.com/content/6/3/269.refs.html >> Version of Record - Aug 1, 2004 What is This? Downloaded from adh.sagepub.com at Anglia Ruskin University on May 2, 2014 Issue Overview 10.1177/1523422304266086 Advances in Developing Human Resources McLean / INTRODUCTION TO NHRD National Human Resource Development: What in the World Is It? Gary N. McLean The problem and the solution. Recent exploratory research has affirmed the variations in understanding of the meaning of human resource development (HRD) from country to country based on a number of identifiable characteristics of the country. One area identified in the definitions of some countries, which was different from that found in the United States and in some other......

Words: 3150 - Pages: 13

Premium Essay

Multiple Choice

...MULTIPLE-CHOICE QUESTIONS 1. Human capital investment consists of: a. any activity that enhances the quality of labor b. expenditures for formal schooling only c. expenditures for on-the-job training only d. any activity that leads to the substitution of physical capital for labor 2. “Expenditures on education and training can be treated as investment in human capital.” This statement is: a. true—current expenses are incurred with the expectation they will be more than compensated for by greater future returns b. true—education must be financed by borrowing money c. false—the market for college loans is too imperfect to be consistent with investment models d. false—education is purchased for its current (consumption) value, not its future (investment) value 3. Approximately what percentage of the U.S. population had completed four or more years of college by the year 2006? a. 8% b. 14% c. 29% d. 41% 4. Age-earnings data show that: a. differences in earnings by education level disappear for workers age 55 and over b. men’s earnings increase with educational level but not women’s earnings c. earnings rise with factors such as family background and personal drive, but not education level d. higher educational levels are consistently associated with higher earnings 5. Available evidence indicates that: a. age-earnings profiles vary with education, but not with age b. age-earnings profiles vary with age, but not with education c. age-earnings profiles of...

Words: 366 - Pages: 2

Free Essay

Intellectual Capital

...interest in Intellectual Capital (IC) has been the core factor it is being developed rapidly (Juma and Paine, 2004; Bontis, 2001). IC was first being acknowledged in 1995 by Skandia when it published the world’s first IC yearly report (Edvinsson and Malone, 1997). Definition of Intellectual Capital (IC) There have been tremendously abundant definitions of IC (refer to Appendix 1). In general it may seen synonymous with knowledge capital and asset, intangible and visible assets (refer to Appendix 2). This also includes human capital, information assets as well as the enclose value of organisations (Bontis, 2001; Tseng and Goo, 2005). Itami (1987) refers IC as organisation’s intangible assets that consist of experience, customer relationship and information, organisation’s repute and culture and intellectual property. This consistent with what mentioned by Stewart (1997) where IC comprises intellectual material that is able to generate wealth. The closest definition of IC would be from Roos et al. (2005) where IC is said to be the non-physical besides non-monetary capitals controlled by organisations that leads to value formation. According to Stewart (1997), there are three components for IC, which are human capital, structural capital as well as relational capital (refer to Appendix 3). Components of IC Human capital happens to be the capital, embedded in a person’s mind and stays together in a person. When a worker quits, the human capital that includes skills,......

Words: 2725 - Pages: 11

Premium Essay

Entrepreneur & Role Model

...TI 2011-061/3 Tinbergen Institute Discussion Paper Entrepreneurship and Role Models Niels BosmaA Jolanda HesselsB,C Veronique SchutjensA Mirjam van PraagD Ingrid VerheulE Utrecht University; B EIM Business and Policy Research, Zoetermeer; C Erasmus School of Economics, Rotterdam; D Faculty of Economics and Business, University of Amsterdam; E Rotterdam School of Economics; all in the Netherlands. A Tinbergen Institute is the graduate school and research institute in economics of Erasmus University Rotterdam, the University of Amsterdam and VU University Amsterdam. More TI discussion papers can be downloaded at http://www.tinbergen.nl Tinbergen Institute has two locations: Tinbergen Institute Amsterdam Gustav Mahlerplein 117 1082 MS Amsterdam The Netherlands Tel.: +31(0)20 525 1600 Tinbergen Institute Rotterdam Burg. Oudlaan 50 3062 PA Rotterdam The Netherlands Tel.: +31(0)10 408 8900 Fax: +31(0)10 408 9031 Duisenberg school of finance is a collaboration of the Dutch financial sector and universities, with the ambition to support innovative research and offer top quality academic education in core areas of finance. DSF research papers can be downloaded at: http://www.dsf.nl/ Duisenberg school of finance Gustav Mahlerplein 117 1082 MS Amsterdam The Netherlands Tel.: +31(0)20 525 8579 ENTREPRENEURSHIP AND ROLE MODELS Niels Bosma A, Jolanda Hessels B, C, Veronique Schutjens A, Mirjam van Praag D, Ingrid Verheul E A Faculty of Geosciences,......

Words: 11822 - Pages: 48

Premium Essay

Role of Research in Human Capital Development

...Emphasis on human capital is a recent development. For a long time, concern has been placed on other factors of production. It was not until recently that attention shifted to Human capital which has led to a massive wave of investment in human capital development. Human capital development is the term used in referring to factors such as education, health, and other variables that can raise productivity. It refers to the ability to perform work so as to produce economic value. To a large extent this a function of the skills and knowledge workers acquired through education and experience. When viewed from a macro perspective, Human capital represents the human factor in an organization and this consists of the combined intelligence, skills and expertise of workers that gives the organization its distinctive character. It consists of those elements of the organization that are capable of learning, changing, innovating and providing the creative thrust which if properly motivated can ensure the long-term survival of an organization. Increasing attention is being given to Human capital due to globalization and its attendant saturation of the labour market. Concern about the issue has been being compounded by the recent downturn in the various economies of the world. This has led Organisations to appreciate the need to leverage on the workforce for competitive advantage in order to thrive and keep ahead of the competition. One major way of doing this is through human......

Words: 1592 - Pages: 7

Free Essay

Human Capital

...1. Introduction - The role of Human Resource During the early 20th century, the primary role of human resource is a care taker. Primarily they are involve in record keeping of the employee personal information, the most administrative job scoop. Hence during that period of time most human resource personnel is not required to go through formal training. Moving forward to 21st century, the primary role of human resource has been shift from a care taker to strategic planner which is vital for all companies. Not only they are required to maintain employees' record, in addition human resource personnel is required to think of strategy and ways to bridge between the employee and company management. Not only they are required to go through formal training, experience plays an important part as well. In modern days, human resource is known as a "people" profession. Their main asset are human and intellectual capital. As a human resource personnel, they are required to plan and execute plans to retain talent at the same time they have to ensure that human resource strategy is in line with their organization strategy. The foundation of an organisation is employee, in other words is intellectual capital in this main asset of an organisation. Even though in 21st century most company is moving towards machinery and technology but all these is build on intellectual capital. According to most researches, not only Human resource increase employees' capabilities in discovering......

Words: 905 - Pages: 4

Premium Essay

Intellectual Capital

...MEANING OF INTELLECTUAL CAPITAL This is the intangible value of a company, and is measured as the difference between the enterprise value of a company and the market value of its tangible assets. Intellectual capital is knowledge that can be exploited for some money-making or other useful purpose. The term combines the idea of the intellect or brain-power with the economic concept of capital, the saving of entitled benefits so that they can be invested in producing more goods and services. Intellectual capital can include the skills and knowledge that a company has developed about how to make its goods or services; individual employees or groups of employees whose knowledge is deemed critical to a company's continued success; and its aggregation of documents about processes, customers, research results, and other information that might have value for a competitor that is not common knowledge. Classification of Intellectual capital • Human capital- The value that the employees of a business provide through the application of skills, know-how and expertise. It can be defined as all the unique ideas, skills, and knowledge that an individual owns and contributes to an organization. • Structural capital- Structural capital is the structures and mechanisms that help support employees and includes procedures, routines and everything that is left in the organization. It includes processes, intangible assets like patents, and trademarks, as well as the organization’s image,......

Words: 1263 - Pages: 6

Premium Essay

Theoretical Review of Labour in Agriculture

...the first wide scale economic activity. It serves as the sustenance of mankind, the oldest most reliable energy source for human beings; food production. Throughout the ages agriculture as we know it has changed. As economies developed from subsistence to trade and developed trading economies so has agriculture. Currently, in today’s world, we see agriculture as an important industry to any nation. It serves as one of, if not the most, powerful poverty reduction sectors in any nation. This is so because agriculture dominates the rural areas; which are notorious for being resource immobile, isolated and poverty stricken. Henceforth, implications for agriculture and its development becomes an important concern for every nation. Labour being an important factor of production, and one which is most variable in the short run, an analysis on its influence in agricultural production seems almost mandatory. In this sector of interest, the labour available tends to diverge from those of other sectors, in terms of characteristics. Labour in agricultural production is characterized by “a high age of agricultural workers & low levels of educational attainment”(A.Bailey, 2012). This signifies relatively low levels of human capital in the industry and hence restricts the sector from utilizing skilled labour. What is human capital? Human capital can be referred to as the set / stock of skills an individual possess that can be rented out to employers. These......

Words: 1077 - Pages: 5

Free Essay

Mr Yang Chen

...successful in venture creation. Also, opportunity recognition means the perceiving possibility of starting a new business and leading to considerable profit. There are two types opportunity recognition ‘internal perspective’ and ‘external perspective’. Internal perspective means entrepreneurs should make sure that problems and needs identified before make a decision which is risky, but external perspective denotes they should make the decision to start a venture precedes opportunity recognition. Most of entrepreneurs looked at three methods of discovery opportunity recognition ‘active searching’, fortuitous discovery’ and ‘opportunity creation’. However, social capital and human capital might be affected on opportunity recognition when entrepreneur creates a new business. This paper is going to discuss how human capital and social capital influence on each method of discovery opportunity and how those three methods help entrepreneurs to recognize valuable opportunities. The first significant theoretical model of opportunity identification is an active search, and those people who are advocating the active search method propose that individuals recognize opportunity through purposeful, deliberate, conscious search. For instance,...

Words: 2452 - Pages: 10

Free Essay

Last Day

...colourful career. For this, we celebrate the memories we had and the parting of a great man, Encik Adnan who will be leaving us soon to join a multinational company as the Director of Human Resource. Please lend me your ears as I summarize the history of his career with us here in Starter Sdn. Bhd. Encik Adnan started as an Executive in Human Resource eighteen years ago. I still remember when he first walked in through that door, with his side parted hair-do and a beaming smile , confidently he swayed his way into the interview room. Not a strand of hair out of place, with an air of confidence he won the heart of our then Head Of Human Resource, Mr Kumar. Like many young chap of his age then, he was so eager to learn new things in a new environment. His ability to absorbed and learned new things quickly set him into steam. Soon, his talent got the management’s attention and was promoted to Senior Executive.. Not slowing down the momentum, he quickened his phase to learn more new things and injected new ideas into the system. And soon enough the management knew it was time to again lift him up to an Assistant Manager post. Shouldering bigger responsibility, Encik Adnan continues to marvel at what he does. Then, in the year 2009, he was promoted to the position he is now, the Head of Human Capital...

Words: 330 - Pages: 2

Premium Essay

Homework 4 Managerial Economics and Organizational Structure

...You are here * eCleary * / ► ECO645-02120109 * / ► Quizzes * / ► HW 4 * / ► Review of attempt 1   * ------------------------------------------------- Home * ------------------------------------------------- About Us * ------------------------------------------------- Students * ------------------------------------------------- Faculty * ------------------------------------------------- Library * ------------------------------------------------- Course Essentials * ------------------------------------------------- Support * ------------------------------------------------- College of Graduate Studies Welcome Contact Us Cleary University Student Portal e-mail Faculty Portal e-mail Library Login Research Wiki Cleary Library Blog NoodleTools APA Guide Academic Policies eCleary Essentials eCleary Student Guide Support eCleary FAQ Welcome Contacts Resources HW 4 Review of attempt 1 ------------------------------------------------- Top of Form Bottom of Form Started on | Sunday, 5 February 2012, 09:19 PM | Completed on | Sunday, 5 February 2012, 09:58 PM | Time taken | 38 mins 15 secs | Marks | 13/20 | Grade | 6.5 out of a maximum of 10 (65%) | Question 1 Marks: 1 A compensation program that includes all performance indicators that influence an employee's output is called the: Choose one answer. | a. informativeness principle. | | | b. incentive coefficient. | | ...

Words: 1352 - Pages: 6

Premium Essay

Did the Commodity Price Spike Increase Rural Poverty? Evidence from a Long-Run Panel in Bangladesh

...commodity price spike increase rural poverty? Evidence from a long-run panel in Bangladesh Abstract We assess the effects of the dramatic rise in agricultural commodity prices during 2007-2008 on income dynamics and poverty among rural households in Bangladesh. A unique panel data set allows us to put the effects of recent events in the context of long-run trends in income and poverty. We use data from a nationally representative longitudinal survey of rural households in Bangladesh collected in four waves in 1988, 2000, 2004, and 2008. Nargis and Hossain (2006) analysed income dynamics and poverty incidence for the first three waves, finding a declining trend in both the incidence and severity of poverty, aided in particular by human capital development and the off-farm employment opportunities. We update and extend the analysis to include data collected in 2008, at the height of a spike in agricultural prices. We find that the price of a balanced food basket increased by more than 50 percent during 2000-2008, while household income rose only 15 percent. As a result the incidence and severity of rural poverty in Bangladesh sunk to pre-2000 levels during 2004-2008. Thus the price spikes in 2007-2008 helped push an additional 13 million people into poverty in rural Bangladesh. Moreover, we find that the determinants of poverty have not been time-invariant. In particular, agricultural production, which had previously been associated with a higher incidence of poverty,......

Words: 267 - Pages: 2