The dominant narratives focus either on remittance flows to expatriates’ home countries, or resistance to - and challenges facing - expatriates in host countries. However, there are several aspects that are often overlooked, particularly how expatriates contribute to the countries they move to – the skills they bring, the taxes they pay, the jobs they fill, and their impact on the demographics of ageing populations in developed countries. While challenges with expatriate integration and adverse effects on native low-skilled populations must not be excluded from the discussion, expatriates do make positive contributions to host economies that cannot be ignored.
To address the gap, The Economist Intelligence Unit has produced a data visualisation programme, ‘What Expatriates Bring’, commissioned by Western Union, which seeks to understand how expatriates impact the countries they move to, with a focus on communities from four regions: India, China, the Philippines and Africa.
The United Nations estimated the number of international migrants at 243 million in 2015, roughly 3.4% of the world’s population. This percentage has remained relatively unchanged over the past fifteen years. While south-north migration, that is movement of people from a developing country to a developed country, is commonplace, there are notable south-south migration corridors as well. The top south-north corridors are from Mexico, China, Philippines and India to the United States, while top south-south corridors are mainly between Russia and the former Soviet states, Bangladesh to India, Afghanistan to Pakistan.
Expatriates bring with them a unique set of skills that diversifies the local talent pool. Close to 60% of expatriates in OECD countries are secondary- and tertiary-educated, pursuing higher education programmes or employment. Indian and Chinese expatriates occupy positions in management, information technology, science and engineering across the United States, Canada and the United Kingdom. The likes of Indra Nooyi of PepsiCo and Sundar Pichai of Google represent the quintessential Indian expat, rising to the ranks of the c-suites in a number of Fortune 500 companies. Nigerians in the United States hold prominent positions in investment banking and legal professions. Our review of innovation data revealed that Morocco’s professional workers abroad filed 876 patents at international locations between 1995 through 2011.The Filipino community abroad, in particular, contributes uniquely to international seafaring. Many Filipinos are medical professionals, primarily nurses, helping to close the skills gap in the healthcare sector.
Through diaspora networks, corporations in host economies are able to explore new markets in expatriates’ home countries. In Japan, businesses seek to employ fresh Chinese graduates in order to overcome language barriers in the Chinese market. In this way, expatriates have created an occupational niche for themselves in companies around the world.
In addition to contributing to economic output, expatriates are job creators as well. Expatriates entrepreneurs have established businesses that employ tens of thousands of domestic workers across sectors ranging from construction to retail. The top 50 Indian expatriate entrepreneurs in the Arabian Gulf now worth over $50 billion collectively. Filipinos living abroad have established businesses in the ethnic food industry, entertainment and media, contributing to the local economy. These businesses also serve as a window to goods, services and talent available in their home countries – from Chinese food ingredients to Indian IT professionals.
Furthermore, through businesses and gainful employment, skilled expatriates make a fiscal contribution in host economies through corporate and income taxes.
By illustrating such examples, this infographic series, which includes an introductory graphic and four community-specific infographics, serves to provide valuable insight on the contribution of expatriates to their host economies.
Access introductory infographic here.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.