Human Capital Mobility

Human capital conventionally refers to accumulated knowledge, know-how, creativity, capability, capacity, education, or training possessed by people (workers). Sometimes, human capital is understood to include also health. The actual usage of the term usually refers to highly skilled workers. The definition of highly skilled differs according to the context. Traditionally, it has been understood as college or university graduates. Often, however, it also includes trained mechanics, carpenters, electricians, and others. Human capital is typically connected to increases in the productivity of workers or organizations as a result of its possession. The rise of the knowledge-based economy has increased demand for human capital, especially in the information technology industry. In the context of globalization, there is migration of skilled workers, who are attracted by better life conditions in wealthier countries.

So far, the United States has been the main destination country. After the World War II, the United Kingdom raised concerns about its human capital leaving. Recently, human capital emigration from developing countries is the main topic. Nevertheless, the geography of human capital mobility is complex and often regionally, industry, or skill specific. Flows from developing countries to developed ones are not the only pattern.

The effects of the migration of skilled workers on source countries are a matter of controversy. High-skilled emigration is often called brain drain to point out the adverse consequence of losing the best-trained workers. As an economy becomes reliant on human capital, the loss of skilled workers poses a serious threat to national productivity and output. Thus, brain drain may hinder economic growth and general development. Positive effects of human capital emigration are mentioned as well. Skilled mobility and networks of migrants may increase a developing country's ability to attract global investment, promote trade linkages, and stimulate technology transfer. Further, sending countries may benefit from remittances. From the internationalist labor market perspective, human capital mobility makes the distribution of skilled labor more efficient as some countries overproduce skilled labor.

Governments are increasingly concerned with attracting high-skilled workers or with keeping them in the locality. Policies of receiving countries generally exploit their attractiveness based on the living-standard difference, making immigration easier for [Page 422]high-skilled migrants. Moreover, the United States and the European Union provide grants and scholarships in their competition for researchers and experts. The sending states, on the other hand, try to address the adverse effects of brain drain. Their policies include education to produce more skilled workers and to compensate for loss, retention by improving local conditions (may include selective treatment of high-skilled workers), support of Diaspora networks, and strategies to promote return and circulation.