Human capital flight migration and employment

The decision to migrate is often related to important life changes. Young people constitute a significant proportion of human capital flight and serious shortages of homegrown talent can result.

The number of international migrants has been growing sharply over the last two decades, reaching 281 million people living outside their home country in 2020, up from 173 million in 2000 and 221 million in 2010.

Two-thirds of all international migrants live in just 20 countries. The US is the largest destination, hosting 51 million international migrants in 2020, followed by Germany, Saudi Arabia, Russia and the UK. India topped the list of countries with the largest diasporas in 2020, with 18 million persons from India living outside of their country of birth. In 2020, young migrants accounted for 11.3% of the total migrant population and 2.6% of youth globally.

In many parts of the world, young people choose or are forced to migrate to escape persecution, poverty or violence or are displaced due to the effects of war or climate change. As such, youth may be refugees, asylum-seekers and unaccompanied minors, but the main reason for migration is economic.

Courtesy of IOM (International Organization for Migration)

Where do they go?

The proportion and number of child and young migrants vary by region. As of 2020, the share of young migrants is higher in low-and middle-income countries than in highincome countries. China, after India and Mexico, accounts for the largest number of people who have left home to migrate elsewhere. There are more than 10.7 million Chinese overseas today – about 60 million, if their descendants are included – according to the International Organization for Migration.

Courtesy of IOM (International Organization for Migration)

Unemployment and the brain drain

According to the latest ILO Global Employment Trends for Youth, the global youth unemployment rate is 13.6%, an estimated 73 million. Between 2000 and 2017, the number of youth migrants increased by 21%, more than twice as fast as the youth population in general (9%). This increase is likely to be the result of high youth unemployment rates in many developing countries and the phenomenon of the “youth bulge” or demographic dividend where there is an expansion of the labour force within an age group.

The situation has been compounded by the pandemic which has severely affected labour markets around the world, hurting young people more than other age groups. Globally, youth employment fell by 8.7% in 2020 compared with 3.7% for adults. Based on available country-level data, the fall in employment has been much more pronounced in middle-income countries.

On the other hand, in June this year, mainland China’s jobless rate among urban 16-24-year-olds climbed to 19.3% and is forecast to continue rising. A record 10.76 million university students will graduate, compounding the problem. Meanwhile, in Hong Kong, youth unemployment rose to 10-15%, much higher than 4-6% for unemployment overall and is expected to stay above 10% in 2022.

Naturally, in the face of unemployment, there is greater motivation to emigrate. For home countries, the brain drain is particularly challenging if young workers move permanently to foreign countries. This can result in a shrinking labour force and can impact economic growth and development. From the perspective of destination countries, the compositional shift towards younger workers is likely to be positive, a “brain gain.”

Unemployment among Hong Kong 20-29-year-olds

Migrant employment has bounced back

Employment rates of foreign-born, % Q2 2019 Q2 2020 Q4 2020

Women account for more than half of resident migrants in most countries

% of female immigrants residing in selected countries

45 50 55 60 65 70 75 80

Switzerland United Kingdom Australia Canada United States Colombia Sweden France Spain

Source: National household and labour force surveys

Canada 52.4%

United States 51.3%

Costa Rica 50.2% UK 52.1%

France 51.9%

Italy 53.7% Sweden 49.6%

Germany Turkey

49.4% 52.4%

Israel 54.7%

Australia 51.3%

Courtesy of International Migration Outlook 2021

Migrants are concentrated in urban areas Migrants contribute more in taxes than they receive in benefits, health & education

Hong Kong: emigration, employment and

talent shortage 35

% of foreign-born in working age population Urban areas Other areas

According to University Grants Committee statistics in July 30 this year the jobless rate of graduates improved to 2.2% last 25 year from 3 per cent in 2020, with 325 out of around 22,000 graduates still unemployed when the survey was done last year. 20 Despite the unemployment rate in Hong Kong, the city’s technology sector, including fintech companies, faces a serious shortage of talent. Emigration from Hong Kong since last year has driven up salaries for technology 0 graduates while expatriates have stayed away from Hong Kong because of the city’s stringent quarantine measures. Some employers who are anxious to retain talent began allowing staff to work remotely from other countries.

15

10 5

CanadaGermany UK US France Spain Italy Source: National household and labour force surveys

World migration snapshots

Revenue Expenditure

l In 2020, international migrants in the

OECD numbered 31.7 million. l Subsequently, all categories of permanent migration fell in 2020, with family migration showing the largest decline. l Migrant employment rates also declined in three out of five OECD countries in 2020. l 1 in 10 migrants were unemployed in 2020 compared to 1 in 15 native-born residents in OECD countries. l Nevertheless, more than two-thirds of immigrants were employed on average in the OECD.Direct taxes & social l Women and girls make up about half of contributions all international migrants worldwide.

Other social protection

Employer Other Other (excl. general public services & defence) Education social contributions Health Indirect taxes e.g. VAT 2.5 trillion USD* Old age

2.0 trillion USD*

*Total across 25 OECD countries, 2017

Read more

• un.org/en/desa/international-migration-2020-highlights • migrationdataportal.org/themes/child-and-young-migrants • migrationdataportal.org/themes/migration-drivers • ilo.org/global/topics/labour-migration/policy-areas/youth-and-migration/lang--en/index.htm • ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/ documents/publication/wcms_737657.pdf • un.org/youthenvoy/globalization-migration/ • bloomberg.com/news/articles/2022-05-31/china-unemploymentrate-for-young-people-hits-record-highs • linkedin.com/pulse/tackling-youth-unemployment-hong-kong-joe-ngai • ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/ documents/publication/wcms_737657.pdf • wsws.org/en/articles/2022/07/23/bunb-j23.html

Sources

• UNICEF, 2020 and United Nations Department of Economic and Social Affairs • migrationdataportal.org/themes/child-and-young-migrants • migrationdataportal.org/themes/migration-drivers • mwyo.org/en/VOqYnO • scmp.com/news/hong-kong/education/article/3186307/jobmarket-picks-hong-kong-graduates-high-demand • thestar.com.my/business/business-news/2022/07/19/hongkong-brain-drain-as-graduates-join-exodus • Tackling Hong Kong’s Brain Drain. Youth IDEAS 58. yrc.hkfyg.org.hk/wpcontent/uploads/sites/56/2021/09/YI058_Summary_Eng.pdf NB Figures are based on 2020 estimates • un.org/development/desa/pd/sites/www.un.org.development.desa.pd/ files/undesa_pd_2020_international_migration_highlights.pdf • un.org/development/desa/publications/international-migration-report-2017.html