Wednesday, September 07, 2011

Encouraging Out-Migration

Trying to retain talent is bad economic development policy. What about promoting brain drain? Concern raised in New Brunswick:

A number of folks told me there were folks in the policy space quietly arguing for more out-migration. If more folks from Miramichi move to Fort McMurray it will be good for them and good for the province.

So, a little wink, wink, nod, nod – let’s export our surplus population, re-equilibrate around a lower level of population and things will be easier.

‘Cept it never is.

I've read about similar quiet policy in Ireland. Short term outmigration can take the edge off of acute unemployment. Geographic mobility is a good way to weather an economic crisis. The long view is more complicated.

As the above blogger argues, the problem is population. A shrinking New Brunswick is a poor New Brunswick. One reason this is the case:

Take the issue of federal transfers. At the insistence of the Ontario Premier one big part of the federal transfer system in Canada was migrated to a per capita model (according to some costing us $60 million a year) – meaning that if you gain population you get a lot more and if you lose population you get less. There is some logic to this but in reality you can’t just ramp up or down public spending based on population levels. The road exists – if there are a thousand people living on it or one. It still needs to be plowed. You still need power poles. You still need to fix potholes.

Reads like a lesson about economies of scale. This is a policy legacy from the Industrial Era, a time of captive labor markets and robust birth rates. Demographically, we live in a different era. Economically, we live in a different era. But the policy game remains the same.

In such a policy regime, I wouldn't advocate for "encouraging out-migration". But I wouldn't set about stopping it, either. Ideally, New Brunswick could have a public discussion about how to benefit from out-migration. Politicians aren't stupid. They will stay far away from any third rail. Give the people what they want and plug the brain drain.

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