Saturday, March 7, 2009

America's Immigrant Brain Drain

Several days ago, a post I made entitled "Chinese Coming Back to China" sparked a mildly interesting back-and-forth between myself and anonymous commenters.

Just a few days after I made this post about immigrants leaving America, Kansas City's Kauffman Foundation released a report claiming that foreigners being kicked out of the country because of visa issues has little to do with skilled immigrants leaving America.

This report supports the view I espoused in the comments of my previous post. I said that America is losing its status as the beacon of ecomic prosperity and freedom to the rest of the world.

The following is the abstract from The Kauffman Foundation's report entitled "America's Loss is the World's Gain:"

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Immigrants have historically provided one of America's greatest competitive advantages. They have come to the United States largely to work and have played a major role in the country's recent growth. Between 1990 and 2007, the proportion of immigrants in the U.S. labor force increased from 9.3 percent to 15.7 percent. Approximately 45 percent of the growth of the work force over this period consisted of immigrants. Moreover, a large and growing proportion of immigrants come with high levels of education and skill. They have contributed disproportionately in the most dynamic part of the U.S. economy - the high-tech sector. Immigrants have co-founded firms such as Google, Intel, eBay, and Yahoo. And immigrant inventors contributed to more than a quarter of U.S. global patent applications.

Since even before the 2008 financial and economic crisis, some observers have noted that a substantial number of highly skilled immigrants have started returning to their home countries, including persons from low-income countries like India and China who have historically tended to stay permanently in the United States. These returnees contributed to the tech boom in those countries and arguably spurred the growth of outsourcing of back-office processes as well as of research and development.

Who are these returnees? What motivated their decision to leave the United States? How have they fared since returning?

This paper attempts to answer these questions through a survey of 1,203 Indian and Chinese immigrants who had worked or received their education in the United States and returned to their home country.

We find that, though restrictive immigration policies caused some returnees to depart the United States, the most significant factors in the decision to return home were career opportunities, family ties, and quality of life.

Download the entire report
I just skimmed the report right now. There is a lot in it. I'm not going to recap the whole thing. The abstract I just posted does a decent enough job of that. Download the .pdf of the article if you wanted to read all of the findings.

This report seems to debunk the anonymous commenter responding to my last post who said:
Funny how you read these articles about Chinese eager to go back to China, yet I have yet to meet one. There is what Chinese tell foreigners and there is what Chinese do -- they are rarely the same thing.

And, no, I'm not a China-basher. I lived there for 6 years. There are positive things about living there, definitely. But anyone who thinks they won't be upgrading their lifestyle in a fundamental way by moving from China to the US or Canada, etc., is ridiculously naive about China.
This commenter, an American I presume, is calling the Chinese who go back to their home country "ridiculously naive about China" for thinking that China might be an upgrade over America. That is quite a claim.

I believe that this commenter fails to take into account a number of things about Chinese culture which would give a Chinese person cause for wanting to stay in China, even if given the opportunity to stay in America.

The most obviously thing to me to be taken into consideration is family. The typical Chinese person's extended family structure is very different from the typical American's. Grandparents help raise children. Aunts and uncles look after nieces and nephews. Nursing homes are a foreign concept.

To have the Pacific Ocean in between a Chinese person and his or her family is not an inconsequential thing.

As the Kauffman Foundation reports, family considerations were an even stronger pull for Indians than for Chinese.

Also according to the report, 87.3% of the Chinese respondants believed that China provided them with better career opportunities than America. That is a staggering number. It's obvious that an overwhelming number of American-educated Chinese people see the US' rotting economy as a terrible thing to be trying to get into right now.

And although 76% of the Chinese respondents said visa issues weren't motivated to leave because of visa issues, that does not mean America's visa policy is enticing people to stay though.

Vivek Wadhwa, a researcher on the Kauffman paper from Duke University, penned an editorial in the Washington Post today. In it, he discusses the difficulties immigrants can face getting visas and green cards and how that comes back to hurt America:
When I started teaching at Duke University in 2005, almost all the international students graduating from our Master of Engineering Management said that they planned to stay in the United States for at least a few years. In the class of 2009, most of our 80 international students are buying one-way tickets home. It's the same at Harvard. Senior economics major Meijie Tang, from China, isn't even bothering to look for a job in the United States. After hearing from other students that it's "impossible" to get an H-1B visa -- the kind given to highly-skilled workers in fields such as engineering and science -- she teamed up with a classmate to start a technology company in Shanghai. Investors in China offered to put up millions even before 23-year-old Meijie and her 21-year-old colleague completed their business plan.

When smart young foreigners leave these shores, they take with them the seeds of tomorrow's innovation. Almost 25 percent of all international patent applications filed from the United States in 2006 named foreign nationals as inventors. Immigrants founded a quarter of all U.S. engineering and technology companies started between 1995 and 2005, including half of those in Silicon Valley. In 2005 alone, immigrants' businesses generated $52 billion in sales and employed 450,000 workers.

Yet rather than welcome these entrepreneurs, the U.S. government is confining many of them to a painful purgatory.

Read the Entire Article
There are obviously a lot things that need to change before America can again attract and retain the world's best and brightest.

Until then, it is very reasonable to think that, as counter-intuitive as it sounds, skilled Chinese people actualizing the dream of making it to America may find that communist China provides them a better life than America can.


Thomas said...

In some sectors, salaries for well-qualified specialists are now as high or even higher in China than they are in the US and Europe (especially when adjusted for cost-of-living).

Many Chinese people I've talked to put a high emphasis on salary, so that would be a strong pull-factor for the highly qualified.

And anyway, why would anyone want to stay abroad if he can earn the same amount of money or more at home? (Apart from those that have issues with China's society and politics, but they seem to be a rather small minority these days)

Having said that, I wonder if the salaries currently paid to certain Chinese specialists aren't simply a bubble waiting to pop. The skills shortage in middle management is bound to ease, especially now that many MNCs are starting to cut costs.

Anonymous said...

When I first lived in China in 1998, almost every well-educated Chinese person wanted to go abroad to study (often to the US) and live / work abroad indefinitely.

By 2004, I noticed that just as large a percentage of well-educated Chinese wanted to study abroad (still often in the US), but they generally wanted to make their careers in China. Quite a difference.

Many of them felt that because they weren't native English speakers, they would have better chances for advancement in China; plus, China was brimming with opportunities from the fast growth.

As to the comment that the standard of living in China isn't what it is in the U.S., that's true (depending on whom you ask I suppose). However, the Chinese students often feel that the career opportunities in China are better for them than in the U.S. And that's pre-crisis.

Anonymous said...

That's a great study by Vivek Wadhwa at Duke University. His study strengthens my anecdotal experience here in Toronto, Canada. Similar articles have also come out.

On an interesting and ironic note IBM North America is laying off employees and has a program to send workers back to China and India, amongst other locales. Reverse immigration.

Here in Canada the immigrant experience is tough. We like to use trained immigrant medical doctors as taxi drivers or office cleaners. It's very tough on them and does not benefit Canada in any way. Immigration Canada has a great PR campaign which lures people here, only for them to be disappointed at lack of truth, support services and a somewhat xenophobic employment environment.

One irrefutable fact that lures immigrants back to the motherland is that North American society is not Chinese enough. Children's Chinese language programs, large Chinatowns and shopping malls, predominantly Chinese communities still does not a Chinese society make. They lament that their kids are not Chinese enough, that they speak English far more than Mandarin. To this I reply they should return home.

Anonymous said...

Like you said, one of the main reason is family, in more sense than just family. It is also opportunity for advancement.

Just think about those returning. They left may be a decade ago, had an education in US, and work experience. These were not just any Chinese. These were Chinese with "connections" in China, or they wouldn't be able to leave, much less have the money to go abroad, and study.

With "connection" in China, the opportunity to make money in China is great, much better than a Chinese in, say, the US. In US, Chinese can get a good job, taking in, say, six figures a year. But in China, you are talking a lot more zeros after that.

With money in China, you are talking about getting a few servants for you home and take care of kids, which is not possible with only a six figure income in the US.

Anonymous said...

"When smart young foreigners leave these shores, they take with them the seeds of tomorrow's innovation." And that is a good thing for the rest of the world and in both the long and short run good for the U.S. The U.S. has been "vampiring" on the rest of humanity for far too long. It is time for the U.S. to become a "normal" country.