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

Haiti	83.6%
Sierra Leone	52.5%
Ghana	46.8%
Mozambique	45.1%
Kenya	38.4%
Laos	37.4%
Uganda	35.6%
Angola	33.0%
Somalia	32.6%
El Salvador	31.0%
Sri Lanka	29.6%
Nicaragua	29.6%
Hong Kong	28.8%
Cuba	28.7%
Papua New Guinea	28.5%
Vietnam	27.1%
Rwanda	25.8%
Honduras	24.4%
Guatemala	24.2%
Croatia	24.1%
Afghanistan	23.3%
Dominican Rep.	21.6%
Portugal	19.5%
Togo	18.7%
Malawi	18.7%
Cambodia	18.3%
Senegal	17.2%
Cameroon	17.0%
Morocco	17.0%
Zambia	16.8%

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 Republic	7.2%
France	1.7%
Germany	3.7%
Greece	10.9%
Hungary	11.1%
Ireland	28.6%
Italy	8.3%
Netherlands	7.6%
Poland	12.7%
Portugal	18.0%
Romania	9.2%
Slovakia	7.7%
Slovenia	10.1%
Spain	3.3%
United Kingdom	14.3

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.