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IZA
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Must Skilled Migration Be a Brain Drain? Evidence from the Indian Software Industry
by
Simon Commander, Rupa Chanda, Mari Kangasniemi, L. Alan Winters
(December 2004)
published in: World Economy, 2008, 31 (2), 187-211
Abstract:
We provide a first empirical attempt at understanding the scale and type of skilled migration
from the Indian software sector and the consequences for firms experiencing loss of skilled
workers. The paper draws on some unique survey evidence of software firms in India. The
results are not generally consistent with an adverse or brain drain story but provide a more
nuanced interpretation. Not only has skilled migration taken a variety of firms – including
significant temporary migration – but the evidence suggests that the impact of mobility on
performance in the sending firms has not been unambiguously adverse. There is some
evidence of associated wage pressure at the height of the software boom in the late 1990s.
But there is also evidence of a strong supply side response as workers acquired training and
entered the sector.
Text: See Discussion Paper No. 1422
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