Competing for Citizens

Over the years, some have expressed concern that openness toward educated foreign nationals results in a “brain drain” from developing countries. Such concern has led some to believe it would be more moral to restrict the freedom of such foreign  nationals to emigrate to the United States and other Western countries. But are such restrictions moral and would they actually make developing countries better off? 

Under some past traditional thinking about “brain drain,” the theory goes that a country is “drained” of talent when engineers, doctors, and others become educated and work in other nations. However, such thinking ignores several realities, the most important of which is that competition, including for citizens, is one of the most positive forces in the world today.

Imagine an Economy with Two Companies

To understand the shortcomings of the traditional “brain drain” argument, it would be helpful to imagine an economy where there are just two companies. In Company A, people are born and raised to work in only one company—the same company their parents worked—and have no choice of working elsewhere. In other words, no matter how poor the wages, working conditions, or opportunity for advancement, the young worker has no choice but to work in Company A.

In contrast, Company B can only retain employees that choose to work there. And workers will only stay in that company if they receive desirable wages, good working conditions, and the opportunity to improve their lot in the coming years. Company A has far more control