Movement of Global Talent

Human Capital.  3 mechanisms change behavior of those who might want to leave

recently india is second largest supplier of nurses to U.S.  see private nursing schools with express purpose of sending nurses to U.S.  expenses is recovered from higher income they make in U.S.  There are 60000 doctors from india abroad (1/10 of india's doctors, mostly in the u.s.)  From the best medical colleges in india, almost half of graduating class is in the u.s.  Very few have contributed anything back to the schools where they were educated.  85% from public schools, and so starts practice with more net worth than u.s. doctor because of no school debt.

Remittances 24 billion dollars/year.  Part of money from capital account (35 billion dollars, about 1/3 of india's reserves).  India also using diaspora to go through hard times... after N-test, when U.S. imposed sanctions, india floated bonds and raised 5 million in 5 weeks.

in contrast to China, where have higher flows of capital in FDI, india flows in direct deposits in banks.  also flows thorugh current acount, more so than china.  (slide shows 50 billion in portfolio flows, 180 billion in remittances)

On return migration:  until late 60s, most indians went back.  But point of reentry was almost entirely public sector.  From 60s to 90s, rate of return dropped sharply.  Since then has picked up, but return to private sector.  Very rapid increase in R&D, almost all staffed by returnees from US.  A lot of US company patents filed from indian R&D.  Few of talent who go back will go into teaching, because pay is so low in public schools.

(lost some notes -- blog crashed)

gist - most indians in US came from top level of society, and have links to policymaking class.  therefore influence on policy is strong

1/3 of all motel rooms in US owned by indian-americans.  non-tradeable sector.  experience in running motel in US doesn't translate into india.  their interest in india, economically, weaker than IT sector. 

most overseas indians are more passive investors (banks, real estate) rather than starting new firms.  buying up firms started by indians in india and making it part of their network.