DG Expert Perspective:

Brain Drain and Return Migration: Advantage India?

By Binod Khadria, Jawaharlal Nehru University, New Delhi, India

June 19, 2003

This article was written by Professor Binod Khadria for a feature on the topic of “Brain-drain
vs. Brain-gain: Policy Responses to Skilled Migration” hosted by the Knowledge Economy
community on the Development Gateway June-July, 2003. Related sources of information can
be found here: http://www.developmentgateway.org/knowledge

International as well as national development agencies have lately been coming out with
policy documents explicitly or implicitly recommending reversal of brain drain through return-
migration. This is in line with long-cherished expectation of developing countries like India. The
task, however, is of very tall order in the short run, particularly in the context of the ever rising
trend of transfers of residence and change of citizenship by ‘knowledge workers’ – the highly
qualified, skilled and experienced personnel, and their families moving from developing to
developed countries. For example, the yearly number of Indian-born getting the ‘green card’ for
permanent residency in the U.S. increased four-fold in quarter of a century, from 17,500 in 1976
to 70,290 in 2001, whereas the corresponding number of Indians who naturalized as U.S. citizens
grew nine-fold from 3,564 to 32,378 (US, INS, Statistical Yearbook 2001, published Feb. 2003).
In the long run, the idea itself may be fraught with dangers of worsening the north-south divide
further. However, the immediate question here is whether return migration (and its corollary,
temporary migration) should be seen as a non-suspect development target at all for reversing the
negative effects of brain drain.

Perhaps the reversal can be discussed more meaningfully by conceiving of a set of

‘benefits’ accruing out of brain drain, aimed at enhancing the human capital as reflected in
higher productivity of the average non-emigrating Resident Indian (RI) worker, rather than
through physical return home of that very human capital which is embodied in the NRIs settled
abroad. Loss of India’s human capital does not take place only through non-participation of the
NRIs in the generation of India’s GDP. It also takes place through non-realization of the
potentially optimal contribution of the non-emigrating RI population that continues to participate
in generating India’s GDP. Two important determinants of the abysmally low productivity of
the average RI worker as compared to rest in the world (e.g., one-hundredth per-employed
person per-hour at 37 cents when compared against the same in the US in nominal terms in year
2000; one-fifteenth at 2.15 dollars in PPP terms, as per the World Competitiveness Yearbook
2000) are India’s widespread poverty of health and poverty of education. Secondly, a sustainable
reversal of brain drain may or may not take place simply through return-migration as, after
return, the NRIs may or may not necessarily engage in socially gainful activities, or may choose
to re-migrate. But it could take place through a compensatory gain, if the optimum potential
productivity of the non-emigrating Indians residing on the Indian soil was realized through

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statutory and preferential channelization of the NRI investments in India into relevant areas of
health and educational development. The relevant NRI ‘investments’ in this context are of three
generic types: ‘Money’ (comprising remittances, bank deposits, equity participation, real estate
purchases in India), ‘Machine’ (know-how and technology embodied in the state-of-the-art
equipment and other physical capital transferred to India), and ‘Man-hour’ (knowledge,
experience and expertise embodied in the personnel returning to devote its time to India).

This perspective, which I have termed as ‘the second-generation effects of brain drain’ in
my book, The Migration of Knowledge Workers (Sage, 1999) and later writings, links up
emigration of the highly educated from India to the nation’s prime objective of universalization
of education at the primary level. Despite the bandwagon expectation of return migration, very
few of the NRIs in the U.S. (less than 1 per cent of the 1970-80 cohort of Indian immigrants)
seem to have actually returned to India permanently, whether ‘to serve India’ or otherwise. On
the other hand, the logic of being driven by a market advantage for themselves in India from a
distance could be more acceptable to the NRIs. Towards this, the NRI ‘investments’ diverted into
the education of the masses will make the average RI a more efficient producer. In the long run,
the average RI can then become a better income earner and a better consumer, looking forward
to a higher standard of living and a better quality of life wherein even the NRIs will find a larger
market for their goods and services. This then could provide a good rationale to force the NRI
‘investments’ into social sector investment.

Who are the NRIs who will comply with such requirements of nation building? On the
basis of the 1994-95 field work that I had undertaken in India and the U.S., ‘Money’ and
‘Machine’ for educational ‘investment’ would come, if at all, mainly from those NRIs who have
resided in the U.S. for 15 years or longer. These are overtly the 1966-80 vintage of immigrants
who have assimilated in the host society of the American economy. Given that the NRIs in this
category belonged to 30-48 years age-group in 1995, the relevant cohort comprised those born in
Independent India (i.e., after 1947) till the enactment of the U.S. Immigration and Nationality
Act of 1965 – the first law in American history that provided for Indians a technically non-
discriminatory immigrant quota at par with other nationalities to enter the U.S.! Apart from
‘Money’ and ‘Machine’, they can be also expected to effect gainful return of some ‘Man-hour’
too – time, not their own but of the 1981-95 (and later) immigrants from India to the U.S. – as
partners or facilitators of their and their collaborating-MNCs’ investments of ‘Money’ and
‘Machine’ in India. Such a trend can already be discerned in the financial-sector MNCs coming
to India.

What is required in India is a definite state policy on brain drain comprehensively

designed by fusion of policies on education and the labour market – national as well as
international. It is neither possible nor necessary to live in an ivory tower in the face of
liberalization and globalization, aggressive WTO negotiations on third-world-related issues like
labour standards and international trade in higher education services, etc. But it is still possible to
use discretion on how India should go about involving its own diaspora in the task of nation-
building from below. Long-term goals and sustainable advantages need not be put at a discount
in exchange of immediate but unstable gains from non-discriminating return migration of the

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NRIs, whether real or imaginary. In fact, 'return migration,' as a corollary of 'temporary
migration', may sound welfare-enhancing at the macro level for sending developing country like
India; but, as I have argued elsewhere, it has long-term 'gains' embedded in it for the developed
receiving countries themselves that far out-proportion such welfare gains on the one hand, and
ignore the 'pains' that it would inflict at the micro level on individuals and families on the other.

Binod Khadria is Professor of Economics at the Zakir Husain Centre for Educational Studies,
School of Social Sciences, Jawaharlal Nehru University, New Delhi, and author of The
Migration of Knowledge Workers: Second-generation Effects of India's Brain Drain (Sage,
1999).

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