America’s loss

Until recently, America has been the prime destination for the world’s brightest and best immigrants. Immigrants had to make big personal sacrifices to provide themselves, their families, and their children with better opportunities than they ever had. These days, countries like India and China are providing better career opportunities and a better quality of life for their nationals than ever before, and many highly educated and skilled workers from these countries are returning home … in record numbers. Because a substantial number of highly skilled immigrants have started returning to their home countries in recent years, the mass exodus has caused a serious “brain drain” on the United States, and results in loss of innovation and competitiveness.

What may have started as a trickle due to restrictive visa policies, is now turning into a flood due to the economic downturn.

The Ewing Marion Kauffman Foundation surveyed immigrants from China and India who came to the United States for education or for work and then who returned home. The researchers wanted to know what was encouraging this mass exodus from the United States in favor of jobs back home.

Vivek Wadhwa, an Indian- American technology entrepreneur turned academic, led the study by a team at Duke, Harvard, and Berkeley universities. The study is called America’s Loss is the World’s Gain: America’s New Immigrant Entrepreneurs, Part IV. This study drew its sample from persons on the LinkedIn professional networking website who were currently working for Indian and Chinese companies and who had obtained US academic degrees or who had worked in the US for a year or more before returning home. The study obtained a 90 percent response rate. It surveyed 1,203 Indian and Chinese subjects. The study found that most of the Indian and Chinese immigrant subjects who returned to their home countries were relatively young (30 and 33 respectively), male, married, and had no children. Most returnees had degrees in management, technology, or science, and most of them also held Master’s and PhD degrees.

The study discovered the following trends:

· Most Chinese immigrant subjects who returned to their home countries were an average of 33 years old, and most Indian were an average of 30. In both groups, most were male, married and had no children.

· Most of these had degrees in management, technology, or science. Of Chinese respondents, 51 percent had master’s degrees, while 40.8 percent had doctorates. Of Indian respondents, 65.6 percent had master’s degrees, while 12.1 percent had doctorates.

· Most returnees originally came to the Unites States for professional and educational development opportunities, and the majority of returnees cited career and quality of life as the main reasons to return to their home countries rather than staying in the US.

· The most common professional factor motivating workers to return home was the growing demand for their skills in their home countries (86.8 per cent of Chinese and 79 per cent of Indians).

· Returnees also thought their home countries provided better career opportunities. They reported significant professional advancement into roles more senior in their home countries than previously held positions in the United States.

· Family and friendship considerations strongly influence immigrants to return to their home countries. Being close to family and friends was a significant consideration in the decision to return home, with many returnees considering care for aging parents to be much better in their home countries (89.4 per cent of Indians and 79.1 per cent of Chinese).

· Since returning home, 56.6 percent of Indians and 50.2 percent of Chinese respondents indicated that they would be likely to start a business in the next 5 years, but they thought their best opportunities for entrepreneurship were at home (60.7 percent of Chinese and 53.5 percent of Indian respondents).

The study cites career opportunities, quality of life, and family ties as the most significant factors in their decision to return. The factors that previously would have weighed dramatically in favor of the US, such as quality of life and professional opportunities, diminish in comparison to more personal and familial reasons.

The picture is not all rosy back home, however. As major difficulties on their return, Chinese complained of pollution, reverse culture shock, inferior education for children, frustration with excessive bureaucracy, and the quality of health care. Indians complained of traffic and congestion, lack of infrastructure, excessive bureaucracy, and pollution. Returnees often said they were generally making less money in absolute terms, but they also said they enjoyed a higher quality of life.

This study highlights a disadvantage the United States has in attracting and retaining skilled immigrants.

The returnees believe that the US remains superior in areas such as education, health care, and certain career opportunities. In education, the United States maintained a significant edge in the minds of Chinese returnees but was at least on a par with education in India in the minds of Indian returnees.

Beyond education, respondents to the survey were ambivalent as to whether they would return to the US if given a permanent visa and an equivalent job opportunity. Fewer than one third of respondents had permanent residency status in the United States. Thus, it is possible that although the respondents do not necessarily perceive visa issues as a major reason to leave, job difficulties resulting from restrictive visa policies also could be playing a major role in spurring the exodus.

Mr. Wadhwa notes that the United States has to start wooing talented immigrants by creating “fast-track” and less restrictive immigration policies and incentives, as nations like Australia, Singapore, Canada, Europe, and Dubai have already done.

This report builds on an earlier Kauffman Foundation report by Wadhwa documenting 1 million H-1B visa holders and their families anxiously awaiting longer-term work visas and growing frustrated with the immigration process. Research from this earlier study showed that immigrants historically have provided one of America’s greatest competitive advantages. Between 1990 and 2007, the proportion of immigrants in the U.S. labor force increased from 9.3 percent to 15.7 percent, and a large and growing proportion of immigrants brought high levels of education and skill to the United States. Immigrants have contributed disproportionately in the most dynamic part of the U.S. economy — the high-tech sector — and immigrant inventors contributed to more than 25 percent of U.S. global patent applications. Immigrant- founded companies based in the United States employed 450,000 workers and generated $52 billion in revenue in 2006.

The full study is available at the Kauffman Foundation website: http://www.kauffman .org/uploadedFiles/americas _loss.pdf.

Steven Thal and Kirsten Gullixson are immigration attorneys in Minnetonka, MN. Contact them by telephone at 952-541-1090 or by email at sthal@thalvisa.com, or kgullixson@thalvisa.com. Kirsten speaks Mandarin Chinese.