Appendix I
What programs do countries offer to immigrants and remote workers and how does it affect brain drain?
Sweden:
Sweden's Public Employment Service offers training programs to improve employability and language proficiency of jobseekers and employees. The Establishment Programme, run by the Swedish Public Employment Service (Arbetsförmedlingen), is the centrepiece of Sweden's integration policy and aims to help newly arrived immigrants learn Swedish, find a job, and become self-sufficient. The 24-month program includes Swedish for Immigrants courses, job coaching, and civic orientation, and participants receive introduction benefits to cover their living costs.
Sweden ranks among the top 10 countries in the world for integration according to the 2020 Migrant Integration Policy Index (MIPEX). Sweden is also one of the 14 countries included in the National Integration Evaluation Mechanism (NIEM), which measures refugee integration policies in 14 EU Member States and provides a framework for evidence-based policy-making. With a score of 72.5 on the NIEM scale of 100, Sweden is ranked at the top of the list of countries evaluated, although the score indicates moderate rather than broad support.
Germany:
Integration courses funded by the Federal Office for Migration and Refugees (BAMF) provide immigrants and refugees in Germany with language and skills training. Such courses offer not only language instruction but also cultural orientation and vocational training. For remote workers, vocational training programs are accessible via the German Federal Employment Agency (Bundesagentur für Arbeit), which provides subsidies for training initiatives.
The international Migrant Integration Policy Index (MIPEX) points out that Germany's approach to integration can be classified as focused on ‘temporary integration’, similar to its neighbouring Western European countries. Among these, Germany offers greater rights and support for equal opportunities than neighbouring Austria, Denmark or Switzerland, but migrants still face issues when trying to settle long-term. Germany scores 58 out of 100 points on the MIPEX 2020 scale, and while its integration policies are slowly improving, with the addition of new countries into MIPEX Germany is no longer part of the top ten integration destinations.
These initiatives can be considered as effective because both countries seem to rank above average when it comes to integration of the migrants, but at the same time this is affecting the countries that are experiencing brain drain like Romania.
Between 2015 and 2022, the number of Romanians in Germany increased by almost double, from approximately 450,000 to slightly over 883,000 people. This represents the most significant growth rate amongst EU citizens, as per official data cited by G4Media.
From 2013 onwards, Romanians rank second on the list of immigrants that migrate to Germany each year, only being surpassed by Syrians. When considering the numbers, Romanian citizens rank fourth, with Turkish citizens having the most significant population of nearly 1.5 million, followed by Ukrainian citizens, with over 1.1 million, and Syrian citizens, with over 900,000.
Case of Romania
The process of Romania's accession to the EU was a turning point for Romanian emigration. From 2001 to 2016, the number of Romanians who emigrated rose from 1.3 million to 3.6 million, or even 4 million. In other words, almost 20% of people born in Romania no longer live there. Due to administrative hurdles, such as the lack of documentation for workers, estimates suggest an even higher number of Romanians working abroad, almost 4.4 million. Italy, Germany, and Spain are the main destinations for Romanian emigrants. They leave Romania for various reasons, such as better wages, supporting their families, and education. Evidence suggests that they stay in their destination country due to higher pay and better working conditions.
While net wages are the main reason for leaving, social services and infrastructure also play an indirect but significant role in motivating people to migrate. For example, without affordable childcare, mothers may be unable to find work, and without adequate transportation, some rural workers may not be able to access jobs in nearby cities.
Emigrants are vulnerable, especially in the early days, as they may lack the cultural and linguistic skills needed to adapt to a new country and claim their rights. For many years, migration for work was illegal in many European countries, even when it was informally tolerated. This meant that illegal workers were unlikely to go to the authorities, even when they were abused. Their employers were also illegal employers, meaning they were more likely to break the law than legally-operating firms.
The situation has improved since EU accession, but the balance of power between employers and employees is still unequal. Some intermediaries put extra pressure on migrant workers to maximise their profit. Reports of slave labour, poor sanitary conditions, and passport confiscation still exist. Even where there are no abuses, migrants may still be vulnerable to loneliness and depression. In Romania, this is referred to as the "Italy syndrome," named after stories of Romanian female workers in Italy. - A common problem associated with migration is the brain drain, that is, the migration of the most educated individuals. Without this educated elite, the country of origin may have difficulty moving forward with its economic development. This is a common complaint in Romania, but the scientific evidence on the issue is mixed.
Overall, Romania still has some of the lowest hourly labour costs in the EU, ranking second lowest after Bulgaria. It also has the fourth-lowest minimum wage, despite significant increases in the last decade. Programs to encourage the diaspora to return have focused on speeches and cash handouts, without giving due attention to other needs of a seasoned professional, such as healthcare and education for children. Finally, a pilot program to reintegrate young Romanians educated abroad as public servants failed due to bureaucracy and politics.
Case of India
In 2020, the United Nations reported that India had the largest diaspora population in the world, with 18 million people from the country living outside their homeland. The UAE, the US, and Saudi Arabia were identified as the countries hosting the largest number of Indian migrants, according to the 'International Migration 2020 Highlights' report by the Population Division of the UN Department of Economic and Social Affairs (UN DESA).
In addition to India, other countries with a significant diaspora population in 2020 included Mexico and Russia, with 11 million each, China with 10 million, and Syria with 8 million.
Several factors motivate the emigration of talented individuals from India, including the lack of higher education opportunities, non-recognition of talents, lower income, and inadequate financial research support. These push factors contribute to the brain drain of skilled workers, particularly in sectors such as health, research, and IT.
The impact of brain drain is felt across many aspects of society, but healthcare is one of the sectors most affected in India. The emigration of health workers from the country to GCC and western countries has been a persistent issue for decades, resulting in a shortage of nurses and doctors. India's nurse-to-patient ratio of 1.7 per 1,000 population and doctor-to-patient ratio of 1:1,404 are below the WHO norms of three nurses per 1,000 population and a doctor-to-patient ratio of 1:1,100.
What are contributing factors to wage disparity that would cause someone to leave their home country?
Differences in demand for labour, supply of qualified workers, and bargaining power cause wages to vary between occupations and industries. Some industries and occupations may offer higher wages than others due to factors such as specific skill demand, labour market conditions, and industry profitability.
Wage levels can vary considerably based on geographic location due to differences in the cost of living, local economic conditions, and regional labour market dynamics. Urban areas and regions with strong economies typically offer higher wages than rural areas or economically depressed regions.
Wage disparities can arise due to discrimination based on factors such as race, gender, ethnicity, age, or disability. Discriminatory hiring practices, pay inequities, and limited opportunities for advancement can lead to lower wages for certain groups compared to others with similar qualifications and experience.
Unionised workers often receive higher wages and better benefits than non-unionized workers due to collective bargaining agreements that negotiate for higher wages, improved working conditions, and other benefits on behalf of union members.
Government policies related to taxation, labour regulations, and minimum wage laws can impact wage levels within a country. In some cases, policies that favour certain industries or sectors may exacerbate wage disparities, prompting individuals to seek employment in sectors or countries with more favourable policies.
Globalisation and international trade can affect wage levels by creating job competition, outsourcing or offshoring labour to countries with lower wages, and influencing labour market dynamics. Global economic integration can result in wage stagnation or decline in some industries or regions while benefiting others. This could prompt others to leave the country.
The establishment of a Global agency could support solutions to challenges, including wage disparity, and unequal access to opportunities.
Solutions:
Wage Disparity: The agency can establish transparent and standardised wage guidelines based on factors such as skill level, experience, and industry standards. This helps ensure that remote workers receive fair and competitive compensation regardless of their geographical location. Additionally, the agency can provide negotiation support and guidance to remote workers to help them advocate for fair compensation.
Unequal Access to Opportunities: The agency can address unequal access to opportunities by investing in infrastructure development, including expanding access to high-speed internet and digital technology in underserved regions (Digital Ministries could be in charge of this, as it is in Taiwan where 95% of population and the Ministry has announced high speed internet as a basic human right). Additionally, the agency can collaborate with local governments, NGOs, and community organisations to provide training, support, and resources to individuals in these regions, enabling them to participate in remote work opportunities.
What are the differences in immigration law that makes remote work unavailable for people?
Labour laws that will apply to an employee working remotely can be a concern. If an employee is assigned to work for a company in another country for a long-term project, then both the employer and employee must follow the labour laws of that country. But when an employee is assigned to work for a company in the Philippines but remains in Japan, it becomes ambiguous as to which country's labour laws apply to the employee. If the employee signs an employment contract with the Filipino company, then the terms and conditions will be similar to those of other locally hired staff in the country. However, as the employee is physically located in Japan, Japanese labour law may take precedence in areas such as leave and termination. Therefore, any company that wishes to use international remote working must consult with employment law experts in the locations where they expect their workers to be based and where the employer is based to determine which employment laws will apply to the employee.
The absence of clear guidelines complicates the hiring process for both employers and employees. Since there is no universal law that applies to everyone, and due to the differences in immigration, tax, and social security regulations between the developed world and the Global South, companies may choose not to hire people from the Global South, thus denying them opportunities. It is challenging to determine which country's employment laws and regulations apply to remote workers.
On the other hand, some countries have implemented Digital Nomad Visas. More than 30 countries and territories have introduced digital nomad visas. These visas are aimed at foreign nationals who work for companies abroad. Some of these visas also include options for self-employed visitors, entrepreneurs, or independent contractors who work remotely for enterprises or customers abroad.
However, most countries, including the United States, have not yet developed a clear policy regarding foreign nationals working remotely for enterprises located abroad.
Estonia became the first country to adopt a visa specifically aimed at international teleworkers in 2019. This visa allows foreign nationals to stay in Estonia while using telecommunications technology to work remotely for foreign companies or as freelancers with primarily foreign clients. Applicants must have a minimum monthly gross income of 4,500 Euros and a health insurance contract covering illnesses or injuries in Estonia. Estonia approves the visa for up to one year for applicants who prove they work for an employer or clients abroad.
Why is Digital Nomad visa a perfect opportunity for brain gain and how does it counterbalance brain drain?
Estonia's model has been adopted by several other countries, which include time restrictions and telework, minimum income, and health coverage requirements, although the maximum duration, required income, eligibility of free-lance workers, and even the names of the visas vary from place to place. The Cayman Islands, for example, has a program called "Global Citizen Concierge Program," while Cyprus provides "Remote Work Visas," and Dubai has a program called "Virtual Working Program."
In addition, the Digital Nomad visa is a good way to counterbalance the brain drain that many countries face, including Portugal.
Portugal Digital Nomad Visas enable remote workers and freelancers to obtain residency in the country. This visa type allows residents from non-EU countries to apply for residency in Portugal. The Portugal Digital Nomad Visa is a national type D visa. Once you receive your visa approval, you can reside in Portugal for at least one year.
To obtain a Digital Nomad Visa for Portugal, you must be over 18 years old, be a citizen of non-EU and non-EEA countries, have a fully remote work on a permanent contract or freelance, prove the total income from all sources that would be at least €3,040, show your accommodation arranged in Portugal, and have at least a one-year extended agreement for rented properties.
The digital nomad visa is beneficial, not only for workers but also for the nations themselves, as it can help address Portugal's brain drain by attracting remote workers and entrepreneurs from around the world to live and work in the country temporarily.
Digital nomads contribute to the local economy by spending money on housing, transportation, food, leisure activities, and other goods and services. Their presence can help stimulate economic growth, particularly in sectors such as tourism, hospitality, and real estate. By attracting remote workers and entrepreneurs, Portugal can foster innovation, collaboration, and knowledge exchange. Digital nomads often bring diverse skills, experiences, and perspectives to the communities they join. This can have long-term benefits for the economy and society.