New Research Challenges Notion of German "Brain Drain"

Since the 1990s, Germans have been engaged in a heated debate about whether highly skilled professionals are leaving the country in increasing numbers for better economic opportunities in the United States. Fueling the debate is Germany's lagging economy. With little economic growth, unemployment hovering around 11 percent, and wage and social security tax totaling about 47 percent, there is great concern that these conditions are pushing out the country's most highly skilled and educated workers.

The issue of "brain drain" has been covered broadly in the media and gained momentum in the political arena as opposition parties made an extensive inquiry to the German government about this phenomenon. The European Economic Advisory Group also tackled the question "Should we worry about the brain drain?" in its annual report. Even the Encyclopedia Britannica article on Germany mentions a "harmful brain drain" in the section on domestic affairs.

Regardless of the widespread interest in the topic, the simple yet crucial question of whether or not highly skilled Germans are leaving Germany to make their homes in the United States remains unanswered. We find that while there is a trend of highly skilled individuals leaving for the U.S., most of the increase is accounted for by temporary migrants and not those who leave for permanent residence.

Methodology

Brain drain refers to a one-way flow of highly skilled and educated people moving from their home country to another in search of better jobs, pay, or living conditions. It should be differentiated from brain exchange, which implies a two-way flow of highly skilled individuals between a sending and receiving country, and brain circulation, which refers to the cycle of moving abroad to study or acquire skills in one country and then returning home to work.

Most studies that focus on the potential migration of highly skilled workers to the U.S. from Germany focus on U.S. Census data, which reveals a dramatic increase in the number and proportion of college-educated Germans in the U.S. between 1990 and 2000. For example, our own analysis shows the number of German born with a bachelors or higher degree entering within five years of the census was about 29,000 in 1990 and 49,000 in 2000, an increase of 69 percent. But has the German labor market permanently "lost" these people?

In order to examine the question of permanence, it is necessary to consult different data sources. Information on the number and characteristics of "immigrants," or those admitted for lawful permanent residence, is collected by U.S. Citizenship and Immigration Services (USCIS), part of the Department of Homeland Security (DHS). The number of visas issued to different categories of temporary visitors, or "nonimmigrants," is published by the Office of Visa Services of the U.S. Department of State.

Combined, these data sources allow assessment of the size and characteristics of both temporary and permanent migration flows into the U.S. from Germany. While the number of immigrants admitted is relatively straightforward in terms of examining inflows of actual individuals, the number of temporary visas issued may overestimate those who actually come to the U.S.. This is because those issued a visa may not use it or may enter the U.S. in the following year. To clarify the skill levels of those who came, we limit some of the analysis to certain nonimmigrant visa types associated with the "highly skilled" (see Table 1).

Stagnating Numbers of Temporary and Permanent Immigrants

Temporary stays provide opportunities to build ties with the U.S. that can make it easier to become a permanent resident. During their stay abroad, some of those who originally intended to return home are offered jobs, others get married to U.S. citizens. Therefore, it is important to look at immigrants as well as nonimmigrants when trying to assess the size and development of migration flows from a certain country.

Figure 1 shows the number of German-born immigrants admitted between 1990 and 2002 and the number of visas issued to temporary visitors (nonimmigrants) from Germany from 1992 to 2002.

Nonimmigrant visas issued prior to 1992 are not included because the numbers were extremely high before Germany's participation in the Visa Waiver Program in 1989. The program allows German business visitors and tourists to enter the U.S. for up to 90 days without a visa.

After the sharp drop in the number of visas issued to nonimmigrants in the early 1990s, the size of both groups, German-born immigrants and temporary visitors, has more or less stagnated, with small increases in the number of immigrants around 1992 and 2001. The 1992 peak in the number of immigrants admitted was caused by returning U.S. soldiers who left reunified Germany with their German wives. The inflows of both groups dropped after the September 11 attacks.

In spite of this overall stagnating pattern, it is necessary to closely look at those groups relevant to the brain-drain debate. After all, it is quite possible that an increase in the number of work-related German immigrants and temporary visitors is concealed by a decrease in the number of German immigrants coming to the U.S. for family reunification purposes.

Growing Numbers of Work-Related Temporary Visitors

Figure 2 shows the development in the number of visas issued to skilled nonimmigrants. These people are the focus of the debate on the emigration of the highly skilled. They include

• exchange visitors (J-1 visas, e.g. visiting scholars)
• workers with specialty occupations (H-1B visas, e.g. IT professionals or professors)
• academic students (F-1 visas)
• intracompany transferees (L-1 visas, e.g. managers)
• workers with extraordinary abilities or achievement (O-1 visas, e.g. top scientists)

Other nonimmigrant groups are not included in the analyses.

According to data from the Department of State, only the number of F-1 visas issued to Germans declined between 1990 and 2004. Generally, the number of visas issued in all other visa categories increased in size, with the largest increase between the mid and late 1990s. While there were only about 17,000 exchange visas (J-1) issued in 1990, this figure had risen to more than 26,000 by the year 2000.

Although other groups also grew in size, the absolute numbers are much smaller. The growth in intracompany transferees (L-1 visa holders) was the next largest, exhibiting continuous growth until reaching a pinnacle of nearly 7,000 visas issued in 2000. Workers with specialty occupations (H-1B visa holders) also grew after a short period of declining numbers in the early 1990s to reach about 4,500 visas issued in 2001.

But do these growing numbers of nonimmigrants actually leave the U.S. with their newly acquired skills and experience? Or is there evidence that an increasing share of temporary visitors decide to stay in the U.S. permanently? A look at the number of those nonimmigrants who become immigrants later on sheds light on this question.

Small But Growing Numbers of Permanent Immigrants

Temporary visitors who change their legal status and become permanent residents are called adjusters; adjusters account for about half of the German-born immigrants admitted annually in the U.S.. New arrivals are defined as persons who were issued immigrant visas by the Department of State overseas.

Figure 3 shows the numbers of adjusters and new arrivals between 1990 and 2002. With regard to the adjusters, only those who adjusted from the status of a highly educated or highly skilled temporary visitor are included in Figure 3. We restricted the number of new arrivals to those entering under categories subject to numeric limitations or restrictive caps.

These new arrivals and adjusters entered under family- and employment-based preferences. For German-born immigrants, 80 percent — adjusters and new arrivals — entered under employment-based preferences between 1990 and 2000. In general, the number subject to numerical limitations excludes those who immigrated as close family members of U.S. citizens or who were resettled in the U.S. as refugees.

The absolute numbers of selected groups of adjusters and new arrivals have been rising, especially since the late 1990s. The numbers for both groups peaked in 2001 with about 2,000 adjusters and 1,800 new arrivals. However, these figures overestimate the actual number of workers who may be lost to the German labor force because they include accompanying family members.

Figure 4 shows the number of adjusters by nonimmigrant category in which they originally entered and demonstrates the substantial differences in adjustments to permanent status between the various types of selected nonimmigrant groups.

Most nonimmigrants adjust their status after two years, so the number of adjusters comes predominantly out of the pool of temporary visitors from the years before. A thorough calculation of stay rates would require individual-level data. Besides, adjustment data includes family members; calculations based on this data tend to overestimate the risk to stay.

Notwithstanding these problems, a very rough estimate shows that about 20 to 40 percent of all H-1B visa holders admitted for temporary stay adjusted to permanent status two years later. There is evidence that 50 percent of all H-1B holders eventually adjust their status to permanent residency.

Unlike other nonimmigrant groups, such as J-1 and F-1 visa holders (which tend to be students), H-1B holders do not have to prove they plan to remain residents of their country of origin prior to coming to the U.S. temporarily. In other words, H-1B visas provide an easier path to permanent residence than the J-1 and F-1 visas.

As expected, skilled workers on temporary work visas (H-1B visas) are most prone to end up as permanent residents after having spent some time in the U.S.. While exchange visitors (J-1) and students (F-1) are by far the largest groups of nonimmigrants, they are the least likely to become permanent residents. Combined, these two nonimmigrant groups accounted for no more than 400 adjusters in any given year, for a total of less than 3,200 permanent additions to the U.S. between 1990 and 2000.

It is important to note that, for all groups, the absolute numbers depicted here are very small and again include accompanying family members.

Conclusion

There is little evidence of permanent, large-scale emigration of highly skilled Germans to the U.S., even though the phenomenon did gain momentum, especially in the mid-to-late 1990s. The increase in German immigration is probably the result of various factors, but is mainly attributed to those Germans who went abroad temporarily for work or study.

This kind of temporary mobility increased substantially over the last decade. However, the increase in the number of permanent immigrants admitted since 1990 is only partially caused by the rather small group of highly skilled new immigrants.

Between 1990 and 2002, only about 16,000 Germans were admitted for permanent residence under the employment-based preference system. Most German-born immigrants were admitted in other categories, for example as immediate family members of U.S. citizens or as refugees, the latter being mostly German-born children of Bosnian refugees who resettled in the U.S. in the late 1990s.

Since the number of Germans who entered the U.S. on temporary visas increased, the number of those who decided to stay permanently increased as well. There is, however, no evidence that the "risk" of highly skilled, temporary visitors becoming permanent resident aliens increased substantially.

The September 11 attacks led to a decrease in the number of temporary visas issued as well as immigrants admitted. This could be caused by either a backlog in visa applications, a drop in approval rates, a decrease in demand, or a combination of all these factors.

Future research has to show how the trends depicted here will develop in the future. Even though top-notch German researchers working and living permanently in the U.S. do exist, they are far more visible in the headlines than in the data.

Sources:

Docquier, F. and A. Marfouk (2004). "Measuring the International Mobility of Skilled Workers (1990-2000) - Release 1.1." Policy Research Working Papers, n. 3381, World Bank (Washington).

Encyclopedia Britannica (2005). "Germany." Available online.

European Economic Advisory Group at CESifo (2003). "Report on the European Economy 2003", Chapter 3. Available online.

Finn, Michael G. (2003). "Stay rates of Foreign Doctorate Recipients from U.S. Universities", Oak Ridge, TN: Oak Ridge Institute for Science and Engineering, Available online.

Mahroum, Sami (1998). "Europe and the Challenge of the Brain Drain." The IPTS Report, Issue 29, European Commission. Available online.

U.S. Immigration and Naturalization Service (1990, […] 2001). "Statistical Yearbook of the Immigration and Naturalization Service." U.S. Government Printing Office: Washington, D.C. Available online (from 1996 on).

U.S. Department of Homeland Security (2002, 2003). "Yearbook of Immigration Statistics." U.S. Government Printing Office: Washington, DC, 2003. Available online.

United States Department of State (1990, […], 2002). "Report of the Visa Office." Department of States Publications: Washington, DC. Available online (from 2000 on).

Stifterverband für die deutsche Wissenschaft (2002). "Brain Drain-Brain Gain. Eine Untersuchung über internationale Berufskarrieren." Available online.