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Review of Policy Research

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International Cooperation to Manage High-Skill

Migration: The Case of IndiaU.S. Relations
ropr_454

509..526

Ted Davis
George Mason University
School of Public Policy
David M. Hart
George Mason University
School of Public Policy
Abstract
Highly skilled people are among the most valuable factors of production in the contemporary world
economy. Some have characterized the competition among nations for these people as a brain drain or
war for talent, which imposes significant costs on the countries of emigration. However, the distribution
of costs and benefits that results from high-skill migration is not necessarily zero-sum or fixed. It may be
altered through international cooperation, producing a self-reinforcing winwin scenario for sending
and receiving countries. Bilateral cooperation, focused on specific sectors affected by migration, is the most
promising approach for realizing such a scenario. This paper explores the prospects and potential for such
cooperation between India and the United States, which comprise what is probably the worlds largest
high-skill mobility relationship. After sketching the broad contours of the relationship, we explore the
prospects for mutually beneficial cooperation in three specific fields of high-skill migration: information
technology services, medicine and nursing, and graduate education.
KEY WORDS: high-skill migration, international governance, IndiaU.S. relations

Introduction

s Castles and Miller (2009) describe in their recent text, we live in the Age of
Migration. An estimated 200 million people were living outside their home countries
in 2005 (Koser, 2008). The irresistible forces (to use the phrase of Pritchett, 2006)
of demographic and wage differentials between high-income and low-income countries will continue to drive international migration for a long time to come.
The highly skilled constitute a significant proportion of international migrants. In
2000, a person with a university or graduate school education was six times more
likely to migrate legally than one with less than a high school education. Thirty-five
percent of the legal immigrant stock in OECD countries, more than 20 million people
all told, fell into the high-skill category, compared with 30 percent a decade earlier
(Docquier & Marfouk, 2005). Some 2.5 million men and women were studying
abroad at the undergraduate or graduate school levels in 2004, a number that had
risen by 50 percent in just the previous five years (Kapur & Crowley, 2008).
The absolute number of international migrants is impressive, and yet international migration is far more constrained than other forms of globalization. Freeman
(2006) points out that the dispersion in the price of a Big Mac around the world
varies only by a factor of two, whereas wages vary by a factor of four to twelve,
depending on how they are measured. Human mobility is constrained for many
reasons. Most people are attached to their home countries and choose not to leave.
Many others are too poor to be able to leave. Yet there is no doubt that public policy
Review of Policy Research, Volume 27, Number 4 (2010)
2010 by The Policy Studies Organization. All rights reserved.

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also suppresses migration flows. If the world were suddenly to become one big labor
market, many more people, including many more of the highly skilled, would
migrate across national boundaries. Oversubscription of visa quotas, wait lists, and
irregular migration around the world testify to this fact.
Receiving country governments feel obliged to regulate people flows in order
to protect key constituents, defend perceived national interests, and avoid the
popular backlash that opening the borders would likely produce. In doing so, these
governments may be missing out on opportunities that would produce mutual
gains for both their own countries and the sending countries. Although much
attention has been devoted to low-skill migrants and their remittances, high-skill
migration has an even greater potential to provide such payoffs. Knowledge and
skills are more potent creators of opportunity than muscle power and the paychecks
it generates. Moreover, the processes by which knowledge and skills are created,
shared, and received are changing rapidly, transforming the high-skill labor market
on a global basis and perhaps expanding the range of opportunities for mutual
gain. Unfortunately, high-skill migration policy is not keeping pace.
This paper explores these issues in the context of the IndiaU.S. relationship,
focusing on bilateral opportunities that could realize a winwin scenario. Highskill migration between these two countries is probably the worlds biggest bilateral
flow, while the wide development gap between them creates significant opportunities for cooperation. These qualities make the IndiaU.S. case substantively important, and they also render it a plausibility probe (Eckstein, 1975) that establishes
our argument as one worth considering in less unique and more typical cases of
bilateral migration relationships.
The paper begins by describing the costs and benefits of high-skill migration in
general, how these are distributed, and how that distribution is changing. Next, we
briefly consider global, regional, and bilateral approaches to improving the governance of high-skill migration, concluding that bilateralism with a focus on specific
sectors ought to be the preferred approach. We then turn to the case study, first
describing the broad contours of the IndiaU.S. migration relationship, and then
considering high-skill migration related to the IT services industry, medicine and
nursing, and graduate education.

The Value of High-Skill Migration

Highly skilled people are among the most valuable factors of production in
the contemporary world economy. Guthridge, Komm, and Lawson (2008) of the
McKinsey consulting firm, for instance, report that their global survey indicates
that intensifying competition for talent [will] have a major effect on . . . companies
over the next five years. No other global trend was considered nearly as significant.
A 2005 Booz Allen Hamilton survey of 1,000 publicly held companies, similarly,
found that the need for talent and proximity to markets was cited by 80 percent of
the respondents for locating R&D sites (Jaruzelski, Dehoff, & Bordia, 2005). A 2007
study by the same firm found that three-quarters of the companies that expand
offshore indicate that access to qualified personnel is the most important driver of
their location decision (Couto, Mani, Lewin, & Peeters, 2007).

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It is not surprising, then, that global demand for highly skilled workers is
rising. Modern technology, especially information and communications technology, is complementary to highly skilled work, even as it displaces unskilled labor
(Acemoglu, 2002). Demand for talented people is strengthened by the perception
among firms and governments that competitive advantage in knowledge-based
industries tends to cumulate within organizations and in geographical locations in
a self-reinforcing, path-dependent fashion. These actors would sometimes rather
pay too much for talent than miss an opportunity to participate in a new high-tech
sector.
Moreover, new organizations and locations are entering into or strengthening
their positions in the high-skill labor market. New technologies and new business
strategies have catalyzed the emergence of global production networks, and, more
recently, global innovation networks (Ernst, 2006; Jones & Kierzkowski, 1990; Lynn
& Salzman, 2005). These network structures make it easier for existing firms to
relocate a range of knowledge-oriented activities that engage engineers, managers,
researchers, and other highly skilled employees. They also allow firms that had not
done so before to participate in such activities through contracting, alliances, and
other flexible arrangements (Rosenkopf & Almeida, 2003).
As in the business world, both incumbents and new entrants among national
governments are emphasizing the attraction and retention of highly skilled
workers. Canada and Australia have sought for decades to draw in such workers,
and they continue to tinker with their immigration policies. The United Kingdom
and France have recently instituted policies that their policy makers hope will allow
them to compete more effectively for global talent. Even Germany and Japan, which
have not historically welcomed immigrants, are beginning to adjust to the new
realities (Hart, 2006b). Among the new entrants, Taiwan, Ireland, and Israel have
demonstrated that wooing home expatriates can be a very valuable component of a
knowledge-based economic development strategy (Breznitz, 2007). Their example
is now being emulated by middle- and lower-income countries worldwide, notably
China (Cao & Simon, 2009).
The United States and India are not exempt from these trends. The United
States remains the central hub of the global high-skill migration system, and it has
not felt the pressure to adjust its policies as acutely as other incumbents. But it has
made important changes in recent years, as we describe in more detail below, and
high-skill migration policy remains on the U.S. governments agenda. India, for its
part, has not been as aggressive in this domain as many other new entrants. But
it, too, is taking increasing note of the competition for talent, for instance, by setting
up a new Ministry for Overseas Indians, which seeks to tap into the diasporas
financial, organizational, and human resources to foster development back home.
The Old Conventional Wisdom: Migration as a Zero-Sum Game
Countries and companies typically assume that the competition for talent is a
zero-sum game: when a highly skilled person crosses national or organizational
boundaries, all the payoffs from the human capital that she carries with her will
follow. Common metaphors reflect this assumption. Since the 1960s, international
dialogue on high-skill migration has focused on the idea that a brain drain makes

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the rich richer and the poor poorer. More recently, the metaphor war for talent
has taken hold (Michaels, Handfield-Jones, & Axelrod, 1998; The Economist, 2006).
The zero-sum perspective finds some support in recent research. Simulations of
the world economy carried out by Winters, Walmsley, Wang, and Grynberg (2003),
for example, show that the migrants themselves and the economies that receive
them derive benefits from a simulated increase in international migration, whereas
those left behind in the source countries are made worse off. Kapur and McHale
(2005) make the qualitative argument that high-skill migration strips sending countries of institution builders and acts as an escape valve for reform energy. New global
data sets show that emigration rates among the highly skilled in some small countries exceed 70 percent (Docquier & Marfouk, 2005). It is difficult to imagine a
scenario in which such countries are made better off by such massive flows (Marchiori, Shen, & Docquier, 2009).
Although the point is sometimes lost in political debate, the Winters and others
(2003) simulations point out that the migrants themselves are the most significant
direct beneficiaries of migration. They are able to reap higher returns on their own
human capital by matching it to complementary resources that are far more abundant in the receiving countries, such as other talented people, state-of-the-art
equipment, and organizational wherewithal. Pritchett (2006) thus argues that
migration is development. National income statistics look quite different if they
are calculated by summing up the earnings of all those born in a particular country,
regardless of their current place of residence, than they do if they are measured
within the geographical boundaries of a nation (Clemens & Pritchett, 2008).
Of course, receiving countries typically measure their GDP in the conventional
way, leading most analysts to conclude that skilled migration benefits these countries. Even Borjas (1999), an economist who dissents from the conventional wisdom
in his profession that favors free trade in people with respect to low-skill migration, accepts the view that skilled migration is beneficial for receiving countries.
Some analysts go beyond the conventional human capital accumulation argument,
claiming that the diversity of ideas and relationships that migrants bring to their
new homes enhances their knowledge spillovers. The magic, states Zachary
(2003), is in the mixing.
Positive-Sum Logic: Brain Gain and Brain Circulation
Although still dominant, the zero-sum logic of the brain drain and war for talent
has come under increased scrutiny over the past decade. Scholars like Stark (2004)
and Saxenian (2006) have developed the concepts of brain gain and brain
circulation as alternatives to the conventional wisdom.1 These approaches to highskill migration encompass its indirect feedback effects and reflect the impact of
declining costs of transportation and communication.
The brain gain argument views the opportunity for skilled migration as an
increase in the expected value of investment in education. If a college graduate can
earn five figures as a nurse in Dubuque or an engineer in Dubai, instead of four
figures delivering mail in Manila, the thinking goes, more people will seek such
degrees. That, in turn, will lead social entrepreneurs and policy makers to build out
an educational infrastructure to serve this demand. Some of those who get an

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education as a result of the growth in this infrastructure do not migrate in the end,
leaving the sending country better off than it would have been. Beine, Docquier,
and Rapoport (2008) conclude that countries that contain about 80 percent of the
global population, mostly in large countries, are made better off by current levels of
skilled migration as a result of this feedback effect. Docquier (2006) argues that the
optimal skilled migration rate is positive in many cases.
The brain circulation perspective asserts that the declining costs of transportation and communication allow people to capitalize on knowledge over much
larger distances than ever before. Knowledge spillovers are much less localized than
they used to be, thanks to more frequent personal visits and massive bandwidth.
Members of a diaspora can more easily maintain strong relationships with the
friends and colleagues that they left behind than they could in the past, and these
social networks in their home countries capture some of the benefits that would
have been concentrated in the receiving country in the past. Saxenian (2006) shows
that a healthy traffic in knowledge and information between Silicon Valley and
Bangalore, India, mediated by Indian expatriates, helps to account for the emergence of the high-technology cluster there. A second generation of research (such
as Nanda & Khanna, 2008, and Agrawal, Kapur, & McHale, 2008) is beginning to
pin down brain circulation effects more precisely.
Return migration, whether temporary or permanent, is more literally brain
circulation. When living conditions improve in the sending countries, return can
become an appealing prospect for high-skill migrants. Return migrants bring with
them the social capital as well as the human capital that they have gained during
their sojourn abroad, facilitating continued international collaboration in creative
and business activities. Ireland has been one of the most successful countries in
altering its skilled migration pattern, turning an outflow of its own nationals into an
inflow not only of its own nationals but other countries citizens as well (ORiain,
2004). Mayr and Peri (2008) find more generally that return migrants who earn
a wage premium on account of their foreign experience can have a significant
positive impact on the country of origin.
Brain drain, brain gain, and brain circulation are all plausible theoretical arguments, and all are backed by some empirical evidence. Whether the combined
benefits and costs of brain drain, brain gain, and brain circulation are distributed
evenly among the sending and receiving countries or accrue disproportionately
to one or the other will vary according to circumstances. Most important for our
purposes here, circumstances are not dictated by nature, history, or the market
alone. Public policy can shape them as well.
Shifting the Balance: The Case for Bilateral Sector-Specific Cooperation
States typically view control over migration flows to be a fundamental attribute of
sovereignty (Cornelius, 2004). They implement migration policies in response to
powerful economic and social interests within domestic civil society. These policies
usually contribute to the security and foreign policy objectives of the state itself
as well. Although the metaphor of war for talent is exaggerated, governance of
high-skill international migration is primarily determined on a unilateral basis as
each state pursues its own sovereign interests (Hart, 2006a).

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Competition for brains among states, each of which is independently pursuing

its perceived self-interest, is not necessarily a bad thing. One salutary effect of such
competition is to give greater leverage to skilled migrants (Kapur & McHale, 2005).
The interests of the migrants themselves are usually underrepresented in the
international arena, since they are not perceived to be full members of either their
country of origin or their country of destination. International competition for
skilled migrants may also enhance the brain gain dynamic by boosting the payoffs
from the acquisition of education.
The same competition, however, also holds the potential to intensify the zerosum logic of the brain drain. Receiving countries, for instance, may seek to
beggar-thy-neighbor by hoarding scarce talent. If sending country educational
systems are too weak or rigid to respond to the increased pull from competing
receiving countries, as the brain gain theory anticipates, the sending countries may
be made much worse off. In a worst-case scenario, one can imagine intellectual
protectionism that both limits migration and also restricts postmigration contacts
with the home country.
Leavening international competition with international cooperation on some
aspects of migration policy can improve the odds of attaining positive-sum outcomes, especially those that might flow from brain gain and brain circulation.
The scope and focus of such cooperation will of necessity vary over time and across
space. Some sending countries are poor candidates for cooperative arrangements,
because they do not welcome contributions to their development by members of the
diaspora or because conditions on the ground (such as civil conflict or political
instability) make it extremely difficult for expatriates to make a contribution. At the
other extreme, some sending countries would enthusiastically embrace greater
cooperation in order to cultivate contributions by their diasporas to their development (Kuznetsov & Sabel, 2006). Opportunities for cooperation also vary because
migration flows are not uniform. For many sending countries, a single receiving
country dominates the emigration pattern due to factors such as proximity, colonial
history, and shared language. These sending-receiving country pairs often have
strong ties of other sorts (trade, investment, diplomacy, etc.) and long experience in
dealing with one another.
Bilateral cooperation, or what the OECD has labeled mobility partnerships
(Dayton-Johnson, Katseli, Maniatis, Munz, & Papdemetriou, 2007), thus seems
to us the most sensible strategy for capitalizing on opportunities to move highskill migration toward positive-sum outcomes. Negotiations at this level can focus
selectively on the most promising opportunities and proceed more expeditiously
than global or regional governance mechanisms. A global approach to international
cooperation on skilled migration, such as the World Migration Organization
proposed by Bhagwati (2003), would be much more cumbersome. The WTOadministered General Agreement on Trade in Services, which is meant to foster the
temporary movement of natural persons to deliver services across borders, has
had a very limited impact (Magdeleine & Maurer, 2008). Less formal global
approaches to governing migration, such as the WHOs efforts related to doctors
and nurses (described below), have gained some traction, but it is fair to say that
governance at the global level is modest in scope and limited in depth. Regional
approaches present fewer barriers than global ones, but nonetheless tend to

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founder on the same kinds of obstacles, especially when they involve countries at
diverse levels of development.2
Although national interests are generally too diverse and sovereignty too powerful a principle for multilateral negotiations to yield concrete outcomes, global and
regional forums on international migration can lead to information exchange,
visibility, and articulation of norms (Martin, Martin, & Cross, 2007) that advance the
prospects for bilateral deals (IOM, 2008, chap. 13). To that end, the Global Forum
on Migration and Development (2008) has defined a set of best policy practices for
temporary migration and tracks their inclusion in bilateral agreements. These
practices include sharing information on labor markets, providing language and
cultural training before migration, addressing social security and pension arrangements, and enabling repeat migration.
Focusing bilateral cooperative efforts to govern high-skill migration on specific
sectors may also be fruitful (Dayton-Johnson et al., 2007). Some sectors, such as
health care and education, are more essential to the development process than
others, and bilateral cooperation with respect to migration may complement traditional development assistance. Other sectors, such as information technology
services, are more deeply affected by new technological opportunities, so that the
dropping cost of brain circulation may be raising the payoffs of cooperation for both
sending and receiving countries. In the rest of the paper, we take a closer look at
one very important bilateral relationship, between India and the United States, and
three key sectors within it, information technology services, medicine and nursing,
and graduate education.
United StatesIndia: The Broad Contours of Their Relationship
The United States and India have a history of ambivalence in their official relations.
During World War II, the United States supported Indian independence from Great
Britain, which was a source of tension in the Anglo-American alliance and the natural
foundation for amity between the new country and the new superpower after India
achieved independence in 1948. The Cold War, however, exerted a stronger influence than these two countries shared history of British colonialism. While India was
never a formal ally of the Soviet Union, it maintained strong ties with the U.S.S.R. in
order to balance Western power and set a course of non-alignment that the U.S.
government viewed with concern. The relationship warmed after the Cold War
ended, although both global and regional tensions inevitably remain.
The bilateral relationship at the level of civil society is considerably more developed than the official relationship, and it has intensified in recent years due to
liberalization on both sides. Economic liberalization opened India to greater trade
and investment in the 1990s. The country has grown rapidly since then to become
the seventeenth largest export market for the United States, and the eighteenth
largest source of imports (Office of the U.S. Trade Representative, 2009). U.S.
foreign direct investment (FDI) in India was $13.6 billion in 2007; Indian firms
invested $3.0 billion in the United States in that year. Bollywood movies have made
an impression on the consciousness of many Americans, while the American cultural icon McDonalds, which was once banned in India, plans to double its presence there to over 300 restaurants by 2015.

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This economic and cultural relationship has been lubricated to a great extent by
migration, particularly high-skill migration. Since the United States liberalized its
immigration policy in 1965 and especially since the further liberalization of 1990,
the Indian-born population in the United States has boomed. According to U.S.
Census Bureau (2000), there were more than a million Indians living in the United
States55 percent of whom entered the United States between 1990 and 2000; and
51 percent of whom are between the ages of 25 and 44. Survey evidence cited by
Agrawal and others (2008, p. 14) shows that Indians living in the United States take
a strong interest in their home country, which is reflected in their heavy use of
Indian media and frequent visits to India.
Indian-Americans are highly educated. Of the Indian-born citizens counted by
the Census, approximately 80 percent had completed some college, and over 69
percent had completed at least a bachelors degree. Among the native U.S. population, these rates are 60 and 27 percent, respectively. The per capita income of
Indians in the United States reflects their commitment to education; it was over
$60,000 per year, more than 50 percent above the average. As we describe in more
detail below, Indians dominate temporary admissions for highly skilled work in the
United States (Monger & Barr, 2009), and they comprise the largest nationality
group among foreign students in U.S. higher education as well (Institute of International Education, 2008).
We believe that these flows make the IndianU.S. high-skill migration relationship the largest in the world. That is not to say that this flow at the aggregate level
poses a brain drain threat to India of the sort that faces many small countries.
As we noted above, the most severely affected countries experience skilled emigration rates of over 70 percent, whereas Indias is but 4.3 percent (7.3 percent for
science and technology graduates) (Docquier & Marfouk, 2005; NISTADS, 2009).
Rather, we would suggest that this relationship is worthy of policy attention
because of the scale of opportunities that it presents and the possibility that protectionist backlash could undermine it. It also presents a scholarly opportunity as
an extreme case (King, Keohane, & Verba, 1994) that may demonstrate the face
validity of our argument about the contingency of payoffs from high-skill international migration and the possibility that these payoffs can be shaped through
cooperation.
IndiaU.S. Cooperation on High-Skill Migration: General Objectives
The largest opportunities that IndiaU.S. cooperation on high-skill migration should
target are the contributions that Indian-Americans and Indian nonimmigrants3 in
the United States can make to Indias economic and social development through
brain gain and brain circulation. The U.S. public and policy makers sometimes
fixate on the impressive software labs and burgeoning call centers of Bangalore and
Hyderabad while neglecting the uncomfortable fact that 41.6 percent of the Indian
population survives on less than a dollar a day (UNSTATS, 2008). India ranks 163rd
among the countries of the world in per capita income at US$1,070 (World Bank,
2008). Although the absolute number of college graduates in India is high (about
three million per year), its tertiary gross enrollment ratio is only about 12 percent, far
less than the United States 82 percent (Institute for Statistics, 2009). Moreover, the

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quality of the Indian education system lags other emerging nations (ASSOCHAM,
2008). Indian development should be a moral imperative for Americans due to the
suffering that poverty imposes on hundreds of millions of Indias citizens. It is also
increasingly perceived, and appropriately so, as a strategic interest of the United
States from the security, economic, and environmental perspectives.
The positive-sum logic of brain gain and brain circulation suggests that
enhancing feedbacks from high-skill migration to economic and social development
in India is not incompatible with sustained contributions by migrants to U.S.
prosperity and continued improvement of the migrants own well-being. The
wealth and educational attainment of the Indian-American community virtually
ensures that the second generation will also be quite successful. Any increase in
permanent or temporary return migration that bilateral cooperation might foster
will not come close to outweighing the contributions of this community to the
United States. Indeed, as we show below, members of this community are key
sources of innovation in science, technology, and business. The binational networks
that they have begun to create may give the United States an important collaborative advantage (Lynn & Salzman, 2006) in the global economy compared with
other high-income nations that are not as open to high-skill migration.
The prospect of aggregate gains for both India and the United States as a result
of high-skill migration does not preclude the possibility that particular groups
within one or both countries will be disadvantaged by it. This possibility carries with
it the threat of a backlash, especially within the United States, based on the view that
migration undercuts the incomes of some professions and facilitates the transfer
of certain jobs to India (Hira, 2007). Some advocates argue that large swathes of
U.S. high-technology industry are in danger of being lost permanently due to the
openness of the country to foreign students and professionals. This position
reverses the usual direction of the brain drain argument, but maintains its zero-sum
concept. A third objective of bilateral cooperation between the United States and
India on high-skill migration, then, in addition to fostering brain gain and brain
circulation and enhancing the contributions of Indian immigrants to the United
States, should be to head off the threat of backlash by limiting high-skill migrations
negative consequences for U.S. workers.
While it may be impossible to eliminate such consequences entirely, adjusting
U.S. policies that appear to produce outcomes that are lopsided in favor of Indian
firms may well be appropriate. However, policy makers should take care that such
actions do not spiral out of control. Unilateral actions by either government could
undermine the benefits achieved through high-skill migration. A program of bilateral cooperation on high-skill migration between India and the United States
should allow the two countries to pursue common objectives while addressing one
anothers concerns.
Both the opportunities for high-skill migration between India and the United
States to achieve bilateral goals, and the threat of backlash that would undermine
the relationship, vary across sectors of economic and social activity. So, too, do the
options available to policy makers. While the broad contours of the relationship
influence what gets done across all sectors, there is also much variation in governance structures at the sectoral level. In the next portion of the paper, we begin to
explore this variation across three key sectors.

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Information Technology Services

The information technology services sector is the hottest flashpoint in the bilateral
relationship. Many of the Indians who flowed into U.S. graduate education in
natural sciences and engineering in the 1970s and 1980s were snapped up by
American industry when they completed their training. They had little incentive
to return to home, thanks to the so-called license Raj, which stifled entrepreneurial energy. The U.S. immigration regime accommodated them by allowing many
to adjust to permanent residence status, albeit often with much bureaucratic
sleight-of-hand. This trend accelerated in the 1990s, as the Indian presence in
Silicon Valley and elsewhere in the U.S. high-technology sector grew rapidly.
A noticeable proportion of new ventures in the United States were founded by
Indian-born high-tech entrepreneurs (Hart, Acs, & Tracy, 2009). Some Indians
were also quite successful in climbing the career ladder within large multinational
IT firms (Saxenian, 2006).
During the technology boom of the 1990s, U.S.-based companies began to bring
increasing numbers of trained professionals from India to the United States on
renewable three-year visas under the H-1B program. When that supply grew tight,
the industry advocated and won a temporary tripling of the size of the H-1B quota
in 1998. Although the H-1B visa covers a wide range of occupations and professions, Indian computer professionals have dominated this category from the mid1990s on (Lowell & Martin, 2008).
The feedback effect to India of this relationship was powerful. A new industry
emerged there in which Indians who had migrated to the United States played a
key role. Multinational firms, such as Microsoft, IBM, and Intel, opened research
and development centers in India, often with former expatriates as their leaders.
More important, a network of IT contractors and subcontractors grew up to
support clients in Silicon Valley and elsewhere in the United States. Spurred by the
Y2K bug, the Indian information technology sector grew at a compounded
annual rate of 55 percent from 1992 to 2000 (Ministry of External Affairs, 2000). In
the present decade, firms such as Wipro, Infosys, and Tata Consultancy Services
(TCS) have become large and powerful players in the global IT industry.
There is some evidence that IT professionals living in the United States have
invested in institution-building in India beyond the IT industry. The Ministry of
External Affairs (2000), for instance, describes programs that include the establishment of a polytechnic school for women, the founding of a childrens orphanage,
and the development of a hospital. In addition, nonresident Indians are working to
create a nonprofit network to foster Indian entrepreneurship that would raise $500
million in capital.
Of course, there have been costs as well as gains in this relationship. Hira (2007)
shows that large users of H-1B visas often flout the intent of the law by using it to
bring in relatively poorly paid, low-skill workers, who may sometimes be directly
responsible for transferring work from the United States to India. Although Kirkegaard (2007) demonstrates that the skill level and pay of U.S. computer professionals remain high, he, too, acknowledges abuses in the program. He further notes that
a handful of large Indian IT companies control a disproportionate share of temporary visas. In 2008, four such firms (Wipro, Infosys, Satyam, and Tata) accounted

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for more than 10,000 H-1B visas. Hira points out that stricter enforcement of the
H-1B visa regulations has encouraged some firms to expand their use of L-1 visas,
which in turn has led to a growing debate over that program. The same handful of
companies dominates the L-1 visa category, too.
The changing nature of the IT services sector, with its emphasis on anytime,
anywhere availability, may call for new forms of cooperation. For the industry to
thrive in both countries, policy should help to create a context that permits firms to
acquire the right skills, at the right time, in the right location. The evolving global
business model in this field is integrated, distributed, multi-skilled, and multicultural (C. Caine, personal communication, September 18, 2009). Firms using this
model seek access to domestic talent and to be able to supplement that talent when
skills are in short supply in order to capture demand in markets around the world.
Bilateral cooperation may be able support and capitalize on this evolving global
dynamic.
To that end, India might institute programs to mitigate abuses by Indian
employers, such as those cited by Hira (2007), rather than rely entirely on a
program of U.S. enforcement. Likewise, the United States might establish Indiaspecific H-1B visas, as it has in agreements with Chile and Singapore, to better
provide Indian access to U.S. labor markets rather than manipulating existing caps
that would otherwise favor smaller countries. Kirkegaard (2007) argues for such an
IT visa, recognizing its value to Indian companies, which could create significant
bargaining value in trade negotiations. Indias bilateral agreement with Singapore
on high-skill migration (IOM, 2008, p. 386) may provide another starting point.
Bilateral cooperation between the United States and India might head off unilateral action in response to the most visible abuses of temporary migration programs
by a small group of firms. Such action could ensure a continued supply of highly
skilled individuals to the United States and growth opportunities to Indian firms.
It would also recognize the changing nature of the global labor market to enable
the pursuit of joint research and innovation opportunities that would otherwise be
missed.
Medicine and Nursing
High-skill migration in medicine and nursing poses a different set of challenges
than it does in IT services. Primary medical care is a personal service that requires
the presence of skilled professionals. The essential nature of health care services
means that the loss of doctors and nurses from developing nations to developed
nations may have significant negative consequences. One fact is certain in this field:
many Indian health care needs are not met. The country suffers from epidemic
diseases that have been eradicated in most of the rest of the world, while treatment
of chronic conditions is highly uneven. In 2004, there were six doctors to every
10,000 inhabitants in India (OECD, 2007). This ratio is about a quarter of that in
the United States, which is a major destination of Indian doctors.
OECD (2007) reports that approximately 18 percent of doctors employed in
OECD countries are foreign born. India is the largest source country for these
foreign-born doctors. The foreign-born share of doctors in the United States is
higher than the OECD average at 25 percent. The enormous size of the U.S. health

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sector means that the United States dominates medical migration into the OECD.
Over 50,000 Indian-born doctors and 15,000 medical students/residents live in the
United States (AAPI, 2009). Only 3.5 percent of nurses working in the United States
were born outside the country, but international recruitment of nurses is growing
rapidly. India is a major target for nursing recruitment (Pittman, Aiken, & Buchen,
2007). The total number of foreign-born health workers in the United States has
been increasing at an annual rate of more than 3 percent.
We need to be careful about asserting cause and effect in this migration relationship. Although there is good evidence that international destinations attract
many graduates of Indias most prestigious medical schools (in the 1990s, for
instance, the emigration rate of graduates of the All India Institute for Medical
Sciences was 49 percent), the overall rate of medical expatriation in India is very
low (Desai, Kapur, McHale, & Rogers, 2009). More important, it is not at all clear
that if the migration option was removed that those professionals who would
otherwise have left India would instead provide services to the countrys neediest
patients. Indeed, it seems likely that many would draw their clients from among
the urban elite, who are already relatively well-provided for (Clemens, 2009; Ministry of Health and Family Welfare, 2009). On the other hand, many foreign-born
doctors in the United States work with populations that are underserved by U.S.
standards. The U.S. immigration system provides visa waivers for medical professionals willing to work with such populations. The so-called Conrad 30 program
has placed 8500 nonimmigrants doctors in rural communities since its inception in
1994 (Conrad, 2009).
Concern about the possibility of a medical brain drain induced the World
Health Organization to publish a draft code on ethical recruitment practices of
medical professionals in 2008. This code is the product of a multi-stakeholder
dialogue that involved NGOs and businesses as well as states and international
organizations. It was led by Mary Robinson, the former President of Ireland. The
code focuses more on the individual rights of workers being recruited than on the
impact of their departure on their home countries. However, it does call on receiving countries to reduce their reliance on migration flows in this area and to support
return migration and the transfer of technology (WHO, 2008).
The WHO encourages its members to use the draft code as a model for bilateral agreements. Perhaps the best developed bilateral arrangement on medical
professional migration exists between the United Kingdom and South Africa.
This arrangement regulates the recruitment process for the National Health
Service, which is the dominant medical employer in the United Kingdom.
Follow-up research suggests that the flow of medical professionals into the United
Kingdom from South Africa leveled off after the NHS code was put in place
(OECD, 2007).
As the worlds largest recipient of medical professionals, the United States is
well-positioned to be a leader in fostering brain gain and brain circulation among
doctors and nurses. India, the largest source country, is a natural partner. The
WHO suggests, among other things, the twinning of health facilities among partner
countries and programs that support the return of migrant professionals, either
temporarily or permanently. As the technology for the provision of health services
by electronic means improves, programs that would allow the virtual return of

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medical professionals from the United States to India might be developed. There is
also great potential for multilateral cooperation in East African countries, for
instance, where there are large Indian populations, significant shortages of medical
personnel exist, and over 6 million adults and 600,000 children live with HIV/Aids
(USAID, 2009).
Graduate Education
Graduate education is a third important sector within the U.S.India high-skill
migration relationship. Like medicine, education generally requires personal presence for the process to have its intended effect. This is particularly true at the
graduate level, where students are picking up the tacit, craft skills that will be critical
for them to be able to practice their professions. Like IT services, higher education
is seen by both the U.S. and Indian governments as a critical input to economic
development and a strategic resource for national competitiveness. In examining
U.S. patent data, Chellaraj, Maskus, and Mattoo (2004) found a significant positive
relationship between foreign graduate students and patent applications, concluding
that a 10 percent increase in foreign graduate students is associated with a 3.3
percent rise in patent applications. International migration in this domain is less
controversial than the other two that we have considered, but perhaps more
consequential as receiving countries seek to retain more of their foreign graduate
students through preferential immigration policies (Sutter & Jandl, 2006).
The U.S. higher education system has long been reliant on foreign graduate
students to populate its courses and work in its labs. The National Science
Board (2008) reports that students on temporary visas earned more than a third
(36 percent) of all science and engineering doctorates awarded in the United States
in 2005. Many of these students stay in the United States permanently. Holding a
student visa for education in the United States does not entitle a student to do so,
but it provides access to employers who can sponsor an application for a long-term
work visa, such as an H-1B, or legal permanent residence. Almost two-thirds of
foreign-born doctoral holders living in the United States, for instance, received a
doctorate from a U.S. institution (National Science Board).
There were over three million students pursuing their tertiary education internationally in 2007a 58 percent increase since 2000 (OECD, 2009). Of these, the
United States receives the largest share at 20 percent. The United States was the top
destination for Indian students studying abroad with 52.8 percent choosing to
study there. Almost 95,000 Indian nationals were enrolled in U.S. universities in
200708, 12.8 percent more than the previous year (Institute of International
Education, 2008). Most of these students were graduate students, and, of these, the
vast majority were enrolled in science and engineering fields (National Science
Board, 2008). Given the aging of the U.S. population, the sheer size of the schoolage cohort in India (nearly a half-billion people under the age of 20), and the
appetite of U.S. educational institutions for students, the flow seems certain to
continue to grow, unless policy barriers arise.
One such barrier is the U.S. security clearance process, which was strengthened
after the terrorist attacks of September 11, 2001. Wait times for visas rose, as did
their costs. Some students were unable to enroll due to delay or rejection. The

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Ted Davis and David M. Hart

security clearance process is not transparent, and the fields of study or other
characteristics that lead individual visa applicants to be subject to special scrutiny
are not always obvious. Although the State Department responded to protests from
the scientific research community by streamlining these requirements, scholars and
researchers often still have problems acquiring visas in a timely manner (National
Research Council, 2009). An example brings the point home: an Indian official
whom we interviewed was planning a visit to the United States to meet with
scientific colleagues, but chose ultimately to travel to Russia instead because of the
difficulty of acquiring a U.S. visa. As the strategic relationship between India and
the United States continues to warm, as evidenced by the nuclear cooperation
agreement signed in 2008, bilateral cooperation on this issue might be fruitful.
Another important area of cooperation relates to the rapidly increasing cost of
education, who pays for it, and who benefits. The Indian public sector makes a
significant investment in undergraduate education, such as that provided by the
Indian Institutes of Technology, which feed U.S. graduate institutions. Some in
India see this as an investment lost when students migrate for graduate education
abroad. On the other hand, many Indian graduate students receive support from
U.S. federal R&D funds, which domestic students and their elected representatives
may view as unwelcome foreign competition. A program of cooperation that facilitates brain circulation and research-oriented collaboration between the United
States and India might head off any backlash that might arise due to these frictions.
In 2008, the United States and India signed a bilateral agreement for strengthening educational exchanges (U.S. Embassy, 2008). This agreement superseded the
Fulbright Agreement and doubled the number of scholarships for student
exchanges with financial support contributed by India, as well as the United States.
Another potential avenue for bilateral cooperation is the Foreign Educator Providers Bill, which is currently before the Indian Parliament. This bill would allow
foreign universities to operate in India. It provides an opportunity to tap into the
large education market in India and establish channels for exchange. Universities
from the United States, the United Kingdom, and Australia have already
approached the Indian government to discuss such ventures (Singh, 2009).
An important long-term consequence of the bilateral flow of graduate students
from India to the United States is the shortage of doctoral degree holders in India
to fill teaching and research positions (Pritchett, 2006). This shortage inhibits
Indias efforts to build human capital and reduces its domestic capacity for research
and innovation. Demographic differences guarantee that the United States will
continue to receive a steady flow of graduate students from India. While many of
these migrants will remain in the United States and contribute to its economy and
society, it is in the United States interest to facilitate the return of some of them in
order to seed further development of Indian higher education. Unilateral action,
either to restrict brain drain on the part of India or to restrict reverse brain drain
on the part of the United States, would miss this enormous opportunity for mutual
benefit. If too few of the hundreds of millions of young Indians are able to receive
a high-quality education, they may be channeled into unproductive pursuits that
could affect India and the United States negatively. Bilateral cooperation may
provide the means to leverage the productive capacity of the next generation of
Indians for the benefit of both nations.

International Cooperation to Manage High-Skill Migration

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Conclusion
High-skill international migration has grown quickly in recent decades, and will, in
all likelihood, continue to do so. The process of globalization, enabled by advances
in information and communication technologies, distributed business models, and
liberalized national policies, has created new choices for individuals who have
skills and knowledge that are in demand. These individuals are increasingly able to
migrate to wherever they believe they can best realize their potential. Many multinational firms and high-income countries recognize the contributions that these
individuals may make to their prosperity and well-being. The home countries of
these migrants, too, see a growing potential to establish productive relationships
with their expatriates, in some cases courting them to return home with lucrative
incentives.
These dynamics are fostering a global market for highly skilled people and the
possibility of a zero-sum war for talent among firms and countries. However, the
distribution of costs and benefits that result from this explosion of mobility is not
necessarily fixed. The mutual benefits of brain gain and brain circulation may,
under some circumstances, outweigh the concentrated costs of brain drain. While
some of these benefits may be realized serendipitously through private entrepreneurship and unilateral national policies, we have argued that a concerted program
of international cooperation, especially one organized at the sectoral and bilateral
level, may enhance the odds of producing a self-reinforcing winwin scenario for
sending and receiving countries.
The IndiaU.S. case that we have explored here is both substantively important
and analytically useful. The high-skill migration flow from India to the United
States that was just a ripple in the 1960s is now a wave. Both countries have
experienced significant benefits as a result. But these benefits have probably
not been as large as they might have been, while the costs have not been minimized to the extent possible. A huge number of Indians remain mired in poverty,
while many Americans see India, its immigrants to the United States, and its
booming offshore services sector as a threat to American jobs and wages. Absent a
program of cooperation, the two countries may be inclined to act unilaterally in
the future, impeding the flow of ideas, reducing knowledge spillovers, and ultimately inhibiting development and prosperity in both. In all three sectors that we
considerIT services, medicine and nursing, and graduate educationas well as
at the national level, opportunities exist to coordinate migration policy for mutual
gain.
From an analytic perspective, we would like to emphasize in conclusion that the
IndiaU.S. case is not typical. Indeed, its scale and complexity make it an outlier
among bilateral migration relationships. Pursuing other cases with different characteristics would be valuable. We would not claim, either, that we have fully theorized or analyzed the variation across sectors within this case. This paper represents
only a starting point for a research effort that might seek to identify the key
characteristics of country pairs and sectors that can, in turn, allow the development
of new governance mechanisms, such as bilateral international cooperation, that
increase the likelihood of win-win results for high-skill migrants, domestic workers,
and the countries in which they live.

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Notes
1 We do not cover here the burgeoning literature on remittances from migrant workers to their home
countries. This is indeed an important feedback channel, but less important, in our view, for high-skill
workers than low-skill workers.
2 The European Union, which essentially permits free movement among its member states of labor at
all skill levels, is an important example of a cooperatively governed regional mobility system. Early
evidence (Farchy, 2009) suggests that migration within Europe has facilitated both brain gain and
brain circulation.
3 Nonimmigrant in the official language of U.S. immigration policy refers to a person who resides in
the United States on a temporary visa. A nonimmigrant may at some point adjust his or her status
to immigrant by receiving legal permanent residence (also known as a green card).

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