Wednesday, 31 March 2010

The Portuguese Brain Drain

   One of the least studied impacts of the sluggish growth of the last decade has been the resumption of large flows of Portuguese emigration. I say large because Portuguese emigration continued during our periods of high growth, such as the 1990s, albeit at a lower pace. However, as the Observatório da Emigração has recently pointed out, emigration has accelerated in the last few years due to the rise in unemployment and low job creation. Unfortunately, we don’t have good data on the emigration flows of the last few years, mostly because most of our emigration is to the European Union, and hence it is a lot more difficult to monitor. I hope to provide news (unfortunately bad news) on this front fairly soon. Meanwhile, while we still don’t have these data, it is worthwhile looking at the evidence already at our disposal.What are, then, the data telling us?
First, it is true that most of our emigration is still constituted by low-skilled workers (i.e. workers with primary or, at most, secondary education). This is not totally surprising, since we also know that, in spite of the improvements of the last decades, the share of these workers in the Portuguese workforce is still dominant. Why do these workers leave? Studies have shown that, similar to what happens with low-skilled migrants from other regions, Portuguese low skilled workers leave in search of better pay and higher living standards, but also due to family ties, as well as to escape from unemployment.
If the story ended here, it could be argued that there was nothing really new in the recent wave of emigration from Portugal, since in the 1960s and in the 1970s low-skilled emigration was also dominant (although the recent wave of emigration is allegedly more “temporary” in nature than in the 1960s and 1970s).
Unfortunately, the story does not end here. Thus, perhaps more surprising, it is interesting to verify that, in all the OECD, Portugal has one of the highest emigration rates of workers with a university education. Simply put, in terms of emigration of the highly skilled, no country in the OECD sends a higher percentage of its university-educated workers to foreign countries as much as we do, with the sole exception of Ireland. 
A recent study by Docquier and Marfouk (2006) has estimated that Portugal is one of the 30 countries in the world most affected by the brain drain of its university-educated workers (more precisely, of all the countries with more than 4 million people). Hence, since the 1990s, Portugal has “exported” about one fifth of its university graduate workers, a rate that puts us at par (in relative terms) with countries such as Afghanistan, Togo, Malawi, and the Dominican Republic (see table below).


Emigration rate of university educated workers_ countries most affected
Haiti83.6%
Sierra Leone52.5%
Ghana46.8%
Mozambique45.1%
Kenya38.4%
Laos37.4%
Uganda35.6%
Angola33.0%
Somalia32.6%
El Salvador31.0%
Sri Lanka29.6%
Nicaragua29.6%
Hong Kong28.8%
Cuba28.7%
Papua New Guinea28.5%
Vietnam27.1%
Rwanda25.8%
Honduras24.4%
Guatemala24.2%
Croatia24.1%
Afghanistan23.3%
Dominican Rep.21.6%
Portugal19.5%
Togo18.7%
Malawi18.7%
Cambodia18.3%
Senegal17.2%
Cameroon17.0%
Morocco17.0%
Zambia16.8%

Source: Docquier and Marfouk (2006)

In turn, another study that analyzed the education levels of emigrants to the 6 biggest receiving countries in the world (Australia, Canada, France, Germany, the UK, and the United States) shows similar results (Defoort 2008). Of all OECD countries, Portugal has one of the worst brain drains. Simply put, and once again, worst than us only Ireland. Not even the Eastern European countries have a brain drain as high as ours (Table 2).

Emigration rate of tertiary educated workers
Czech Republic7.2%
France1.7%
Germany3.7%
Greece10.9%
Hungary11.1%
Ireland28.6%
Italy8.3%
Netherlands7.6%
Poland12.7%
Portugal18.0%
Romania9.2%
Slovakia7.7%
Slovenia10.1%
Spain3.3%
United Kingdom14.3


Source: Defoort (2008)

Third, and more disconcerting, the Portuguese brain drain seems to be increasing. The brain drain declined somewhat in the late 1980s, but then steadily increased. Thus, from about 1990 to the early 2000s, the emigration rate of high skilled workers increased from about 14.4% to 18% of the stock of the working-age population with a university degree. We don’t have much evidence for the last few years, but it would be fairly surprising if we didn’t find this trend accelerating.

Why does this happen? Why does Portugal have such a high brain drain?
Although we do not have specific empirical evidence on the reasons behind the Portuguese brain drain, if we take into account studies for other countries, we can guess that a large proportion of our highly skilled workers is leaving not only in search of higher wages, but also in search of more and better opportunities. Since the sluggish growth of the last decade has led to an increase in unemployment and lower job creation, it is very likely that the Portuguese brain drain has intensified.
What are the macroeconomic consequences of all this? Will the brain drain depress productivity even further? Will the brain drain seriously diminish the supply of skilled workers to the Portuguese economy? Well, as always, it depends. It depends on whether or not the brain drain will intensify even further in the next few years, and, obviously, it depends on whether the Portuguese economy will be able to escape from stagnation. What we know is that the lower the growth, the more the brain drain will tend to speed up.
More importantly, and finally, how can we reverse the Portuguese brain drain? Besides the usual suspects (i.e. the resumption of economic growth and more job creation), I believe that we would go a long way if our policymakers would provide better micro incentives to attract back some of our skilled workers and to retain many of those thinking of leaving. (For instance, at the university level, and since most of us work in the industry, these incentives should include, among other factors, less inbreeding by the Portuguese universities, more recruiting of foreign-based researchers, more competition between universities and research centers, more transparency in job hiring, more rewards to research productivity and excellence in teaching, and more decentralization of public funding to universities and research centers).
What we also know is that the Portuguese brain drain is big and, likely, here to stay. This is a question that we will certainly address a lot more in the near future, both in our academic research and at the public policy level.

11 comments:

  1. Interesting subject. I'm one of those graduates who decided to experience another part of the world. I've left Lisbon in 2008 and I've been living in Stockholm since then.

    I didn't leave due to lack of job opportunities. I graduated in Computer Science from Instituto Superior Técnico which is still a prolific area/industry, so me and my peers didn't have any problem finding a job. Most of us actually had contracts signed before ending our degrees.

    The emigration flow from the 60's and 70's was a flow based on necessity, and as you mentioned, the reasons behind it were related to looking for better life conditions, better welfare and maybe also related to the political climate in Portugal (or?).

    If we look at the emigration flow happening today, I believe we have added another paradigma to it. The low-skilled workers continue leaving the country in search of better welfare, but what about the graduates? I would say it's an emigraton flow based on opportunity: the abolishment of border control between EU countries, the good command of the english language, etc. Also, I believe my/this/younger generation(s) are more ambitious than the previous ones when it comes to "explore the world".

    The decision to leave the family behind also doesn't have such a huge impact as in the 60's and 70's because today we have internet, we have Skype and we have low-cost airlines. It's easy to keep in touch! Before, you would have to wait for a letter to come via snail mail for days or maybe weeks, maybe once every month you could call your family and hear their voice on the telephone.

    However, these two paragraphs don't explain why Portugal shows so high up in the ranking, since all the countries in the EU also have these same opportunities. The question is: Why Portugal?

    Speaking from my personal perspective and experience, there are economical factors and social factors.

    Economically, the salaries for recent graduates in Portugal are miserable. They don't allow a recent graduate to live indepedently. Well, they do allow him to survive independtly which is something completly different than living. Some people will that I should be ashamed of saying that the salaries are miserable, and those people usually compare them to the minimum wage in Portugal, but they are! Sorry!

    Second on the economical perspective: the cost of living is high in Portugal! Everyone argues that "okay, you have a bigger salary but the cost of living is MUCH HIGHER". This as we say in Portuguese is "atirar areia para os olhos" (throwing sand at someones eyes) and it's an illusion that everyone has. I agree the cost is higher, but not that higher unless you compare Lisbon with London. However, compare Lisbon with Stockholm, Berlin or Paris - maybe we'll have different conclusions.

    Socially, there's a growing sense of insecurity that we're going through in Portugal now. It was not a reason that lead me to leave the country, but now it is a reason that has a certain relevance when I think if I should go back.

    Also, our working culture is not based on meritocracy. There were few times I heard my manager saying to me "Good job Paulo!". I would instead hear "You just did your job" (Não fizeste mais que o teu trabalho). This doesn't keep people motivated. However, I believe it is better now than 20 years ago. Management and newly hired are much more closer personally nowadays than before.

    Sorry for having kept the text so long, but I could go on and on for hours about this. I'm also sorry that I'm not supporting any of my suppositions with empirical data, but maybe there's material in this comment for further blog posts.

    And a final thought...

    Personally, I don't think about going back. I might leave Sweden, but there's more of the world to experience.

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  2. More than the actual emigration figures, particularly those pertaining to qualified graduates, what surprises me most is realizing that the figures seem to be much lower for most countries in Eastern Europe. I honestly don't believe skilled Romanian professional emigrate any less than qualifed Portuguese qualified professionals. Was the data of the Docquier and Marfouk study obtained prior to the inclusion of the Eastern block in the EU? There is obviously a bias there if the data was prior to 2004, as it was much more difficult for people from those countries to move around prior to joining the EU.

    I am also very skeptical emigration from highly developed OECD countries. People from the most developed countries in Europe have traditionally always been used to travel and spend time overseas due perhaps to greater openness and higher purchasing power to travel. For example, many UK secondary school graduates traditionally like to embark on a gap year of travelling and working overseas before going to school, and out of tradition and culture, many UK, Dutch or German people are keen to carry out voluntary work in developing countries, particularly in the medical field. So it is hard to measure the emigration outcomes if people from the most developed countries emigrate and like to emigrate a lot as well, albeit for possibly different reasons and just temporarily. How do you account these biases in the overall picture?

    Furthermore, many Portuguese people, for cultural reasons have always had aversion to leaving the homeland and family behind, so even today, a lot of skilled professionals are not leaving not for lack of opportunities, but because of cultural reasons.

    Finally,when we're talking of emigration today, what are we exactly talking about? How do you measure emigration now? Emigration is a more complex phenomenon to study nowadays than it was 40 years ago, because there are so many more differing patterns of emigration than in the 60's or 70's, where the vast majority of people who emigrated did it because of economical reasons. With low cost flights and free mobility across the EU, it is "tempting" to emigrate, but if I go to Germany or Sweden, for example, to do some training for one month, and then come back to Portugal, did that count as emigration? I still see mostly temporary, short-term emigration among skilled Portuguese professionals happening, so should I worry about that? No, these people will bring back new and better skills and knowledge. What I worry about is long-term emigration of skilled Portuguese professionals, but do we have methodologies available to analyse more in depth the phenomenon of emigration?

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  3. After graduation I had my first industry experience working in Portugal. Then I worked for a german company and since then I continued my career in the north of Europe. Even if the wages were the same I would still prefer to work abroad because, in my opinion, the ethics and work culture in Portugal are an obstacle to achieving results and producing quality work. There are too many people in the wrong positions and too many decisions based on friendships and self-interests. In this environment a lot of effort is needed to lobby our work, at the end it is more politics than engineering, it results in frustration and low quality results. A shift in work culture is needed, before it becomes a good option to work in Portugal.

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  4. The reason I have moved to the Netherlands wasn't based (only) on a pursuit for better wages or life. Besides personal reasons, I tend to agree with the perspectives of the first and third comments. Meritocracy. Where I work, results, hard work, creativity and all other set of skills that can improve or meet the organization's goals and targets are truly appreciated and embraced. And promoted. That really makes the difference.

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  5. I believe the brain drain would not me much of a problem if young graduates leave Portugal for 5 to 10 years, acquire skills abroad by contacting with high productivity economies, and return to Portugal in their thirties. An important question is if we can attract them back. Some of the replies left here indicate that this might not be the case. Economic and political, as well as social, transformation of the Portuguese reality is needed to promote the return of highly skilled individuals that at the moment do not consider this hypothesis.

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  6. The brain drain starts long before people graduate. For example, I had low grades in Portugal, both in high school and college. Did I have low grades because I was stupid? No, I low grades because I was depressed due to my unstable family life, which is a rather common situation in Portugal, among those that come from poorer backgrounds. It also did not help to see my classmates whose parents were doctors and attorneys get much better grades... For example, when I finished 9th grade I was the best student in the class in Portuguese, in fact, Portuguese had always been one of my best subjects; when I got to 10th grade at a different school, my new Portuguese teacher decided I was mediocre at best, it took a great deal of effort to get a passing grade of 10.

    When I graduated with a "licenciatura" in Economics, I tried searching for a job. The best I could do was a secretarial job. But, by chance, I had the opportunity to go to grad school in the United States. And I came. I was one of the best students in the department. Before I finished my Ph.D., I already had a job where I made $60,000/year; my mom's retirement monthly payment from the Portuguese government was about 250 euros/month! I have a classmate who graduated with an Econ licenciatura just like me, she currently makes 1,000 euros a month--do the math.

    The problem with Portugal is what is called "Factor C": the effect of the "cunha." Those who know people can get high paying jobs regardless of their personal merit. I remember, not too fondly, that one of my former high school classmates, who got caught cheating at a private university and was expelled, is now teaching at a public university and is the director of a private business--yes, his parents are loaded.

    As an immigrant, I have not been treated very nicely by the people I left behind. Trying to get stuff done in Portugal is a nightmare and more often than not, someone is trying to rip you off. The average Portuguese is a little crook, he's always trying to use other people to get ahead or trying to get money for little effort. If the Portuguese really wanted a better system they would demand one. But most of the time, they are very willing to put up with the system if it benefits them. So now, they must pay the price.

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  7. There is actually a blog about Portuguese "Brain Drain" http://mindthisgap.blogspot.com/ I've been following it for a few years now. It hasn't been updated in a long time, but you can find many cases and reasons for young people who left the nest...
    I'm also a part of the so called "brain drain". Why? Many reasons... But money, career opportunities and mere chance all played their role.

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  8. I belonged to the brain drain. I worked in Germany and then Italy at the European Space Agency.
    I did come back but only because I am one of the rare few that managed to get a good opportunity here. Well...to be precise, I didn't get any opportunity here, I just got the opportunity to work as a consultant from wherever I want. I chose Portugal, because I am from the Algarve and I love the quality of life I have here.
    Still, if I was in any way dependent of the national economics I would probably not have come back.
    The abysmal difference in salary is a major issue. Also, it's even hard to get opportunities - in the industry - to get involved into really high-end work unless you work for some huge company (those who get all the funding and lobby to get all the projects) where you end up being exploited. If you are an academic, you can get involved into high-end research, but still job security is terrible for a researcher in portugal (not to mention salary...).

    Another thing. What worries me the most isn't the high percentage of brain-drain...what worries me is that it isn't the bottom 20% that emigrate...

    Currently, people comeback either because they get "lucky" like I do or just cos they love the country,family, etc.
    We need to convince people to comeback...but where do we get the money to make it interesting for them to come back? I don't mean only salaries...but incentives to entrepreneurship that motive these emigrants to get back and open a business (research/technology-based small and medium companies).

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  9. I have really enjoyed these comments, especially because they give more depth to, but basically mirror what my Portuguese boyfriend says. One factor not explicitly mentioned, at least not that I noticed, is the size of Portugal, both in geography and population. I am American with a Portuguese boyfriend. I grew up in Massachusetts, after which I made my shortest move ever, just over 100 km to college in Connecticut. Then moved to Maine for my first job (515 km) and then to Los Angeles, which, at 4,300 miles, was my longest move. My second shortest move was longer than the country of Portugal (about 570 km) and my longest was about 8 times as big. I now live in Wisconsin. A large country has an advantage in preventing brain drain for several reasons: 1) A large diversity of opportunities exists by the sheer size of a bigger country. You want to be a corn farmer? Go to Iowa, even though it’s further from Massachusetts than Switzerland is from Lisbon, for me the culture and language would be roughly the same and I'd face no bureaucracy whatsoever. You might point out that within the U.S. states there may well be a brain drain, for example from Alabama to San Francisco. That raises the interesting idea of examining this at some de facto socio-economic units rather than national borders. 2) Economic progress is facilitated when there exists a large market not only of consumers (of information and art as well as durable goods) but also of complementary producers that supply intermediary goods (brakes for a car manufacturer or GIS data for a geography professor) with NO tariffs, quotas, or, again, bureaucracy. My apologies for commenting on a topic I know very little about.

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  10. Thanks for your great information, the contents are quiet interesting.I will be waiting for your next post.
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  11. Not only in these countries, but Brain Drain is also a big issue for the India too. The youth power and intelligence is being transferred to other countries leaving less economic growth opportunities for the home country behind.

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