Top 4 insights from Borderless Economics
I have a friend group of expats who moved from Southeast Asia to Berlin. We call ourselves "BER Crew". We were discussing feeling slightly guilty about leaving our home countries and contributing to 'brain drain', for our self-interested pursuit of living a more comfortable life in Germany.
It prompted me to summarize some of the insights from the book Borderless Economics. Here they are:
1-On the balance, ‘brain drain' is a net positive for poor countries, especially poor people. Despite the emigration, the possibility of it creates more skilled work and university graduates, than if migration were banned. Ex — Philippines, the largest exporter of nurses, ends up with more nurses per head than Austria. Even in cases where it causes serious harm, for example dangerous shortage of medical personnel, the only practical solution is to persuade medical personnel to stay by narrowing the wage gap, which can only happen through economic growth. Migration promotes economic growth, so it is ultimately part of the cure.
2-Actually, migration is by far the most powerful weapon in the struggle against global poverty. From 2005 World Bank study: A 3% rise in labor forces through easier immigration delivers $300 billion in benefits to the world’s poor. Compare this to foreign aid, which is mostly wasted or even harmful; and at best, $70 billion in aid delivers only $70 billion in benefits.
- First, the prospect of earning big bucks working abroad spurs more people to acquire marketable skills.
- Second, migrants from poor countries who work in rich ones often send money home. It feeds the elderly, pays school fees, and launches small businesses.
- Third, poor countries have the most to gain from intimate ties with the rich world. Migrants open and widen channels for trade. They also bring home a firsthand understanding of how rich countries work: Knowledge that can be adapted and applied home.
- Finally, and most importantly, migration is good for migrants. If they did not think so, they would not move. The benefits to those who move are colossal and underreported. By far the most effective way for rich countires to help the poor would be to let more of them in.
3-Plus, migration is also the best hope for a more tolerant world. When rich countries allow migrants from poor countries to live and work within their borders, those migrants experience firsthand how a rich country works. When they taste the fruits of tolerance, pluralism and the rule of law, they often find them delicious. And sometimes they carry the seeds back home.
4-All this, at zero cost to the host country, since migrants who work pay more in taxes than they receive government benefits. Migrants tend to be strivers, doers, and risk-takers. Eveywhere they go, they are disproportionately likely to start businesses or make new discoveries. In addition, residents of rich countries benefit from an influx of newcomers willing to mow lawns or cap teeth cheaply and skillfully. Finally, most studies have found the negative effects such as cultural threats, depression of wages, etc. to be small or nonexistent.