February 25 2006 - A study recently published by the
C.D. Howe Institute shows that the slowdown of Canada's productivity growth and the widening gap between
Canadian and US per capita incomes in recent years has led to fresh concerns
about a brain drain of highly qualified individuals and entrepreneurs.
The study takes the form of a collection of essays entitled Brains on
the Move and focuses on the importance
of labour mobility to a nation's economy.
While concerns about a brain drain from
Canada to the USA have been around for decades, the study highlights a subtle shift
in the kinds of brains emigrating in recent years. There is vigorous competition between
developed countries to acquire knowledge and develop leading-edge technology by
attracting highly skilled professionals and technical workers. In one essay, Stephen
Easton examines trends in the flows of scientists and economists from Canada to
the United States. His findings reveal that Canadian scientists are now more than
twice as likely
to move to the US as they were in the 1960s.There has also been a significant
increase in the likelihood that Canadian-trained economists will work outside
In his essay, William Gibson looks at Canadians who choose to obtain at
least some of their education in the USA. Canadians are much more likely to study in the United
States than citizens of other countries - and the trend is growing. And students who
are educated in the US are more likely to look for subsequent employment there.
In another essay, Richard Harris focuses on what he calls the 'Wayne Gretzky model' of the brain
drain. This model proposes that, whereas the number of talented people moving south of the
border might be small, they include 'superstars' whose emigration has a disproportionate
effect on Canada's economy. Moreover, while knowledge
spillovers increasingly drive economic growth, emigration of
highly trained and talented people from Canada to the USA creates a permanent knowledge
gap and sustains an increasing per capita income
gap between the two countries.
Elsewhere in the book attention is paid to:
the effect of government policies on the quality
of entrepreneurs a country may attract;
- the effect of 'cultural clustering' in attracting
talented individuals, particularly those from less-developed countries, to join their ethnic
compatriots in a specific location; and
- the effect of immigration policies on flows of
ncreasingly globally mobile and highly talented individuals.
Increasing economic integration between Canada and the US, as a result of
the North American Free Trade Agreement, has stalled since
9/11, but there are calls for the freer movement of labour between the two countries.
If this happens there may be one of two effects:
- The flow of labour out of Canada could produce a growing skills shortage in
Canada, leading to a reduction in the wage gap between the two countries.
- Investment and jobs could move to Canada to meet the supply of Canadian-grown
Either way, the concept of an integrated labour market in North America will
become a matter of active debate - one, the study concludes, that will rival in intensity
the free-trade debate of the !980's.
the study is available for purchase on the C.D. Howe website.