Impact of Qualified Worker Emigration on Poverty: A Macro-Micro-Simulation Approach for an African Economy

Abstract

This study assesses the effect of international emigration of skilled workers on poverty in an African economy. The empirical analysis relies on three main steps: (i) an econometric analysis based on a sample of developing countries shows that skilled migration has a significant negative impact on productivity in the country of origin, while unskilled migration has a significant positive effect on the same indicator; (ii) using these estimates within a computable general equilibrium (CGE) model, calibrated on Cameroonian economy data, we simulate the impact of emigration on macroeconomic indicators and (iii) relying on the 2007 Cameroonian household survey, the CGE model maps consistent changes of commodity and factor prices across households for a micro-simulation analysis. We find that the current pattern of emigration from Cameroon has contributed to an increase in the number of the poor by 0.8 percentage points. The negative effect of skilled emigration on productivity turns out to be more important than the combined positive effects related to remittances transferred and productivity gains from unskilled emigration. This outcome strongly supports actions by developing countries to optimise contributions from their skilled workers living abroad.