May 14, 2012
Demographers were stunned last month when new data revealed a trend reversal: immigrants are no longer flocking to the U.S., and some have made a U-turn and returned home. Data from the Internal Revenue Service show that 1,800 people, mostly living abroad, either renounced their U.S. citizenship or handed in their green cards—more than the total number of people who did so in 2007, 2008, and 2009 combined. A few made the choice to avoid paying U.S. taxes on income earned abroad, but others are seeking greener pastures in the global economy.
With the U.S. facing a shortage of skilled workers, the wave of immigrants who are turning their backs on America is foreboding. A growing population of highly-educated Americans and foreign nationals educated in the states are less committed to living and working in the U.S., preferring to return to their homelands, many of which are emerging economies.
“It’s only really come to light in the last year or two, but we’re noticing a pattern of highly-skilled children of foreign-born U.S. immigrants leaving the U.S. for the countries where their parents were born,” said Madeleine Sumption, a policy analyst at the Migration Policy Institute. Sumption says the trend is strong in China, India and Brazil where dramatic economic growth over the last decade has opened up opportunities for entrepreneurship and led U.S. multinationals to hire overseas employees with western educations. “We’re putting together a picture of what’s happening partly from data and partly from anecdotal evidence since it’s a relatively new phenomenon.”
Entrepreneurship experts say a combination of booming developing economies, a still-soft U.S. economy, and difficulty obtaining green cards is driving foreign-born U.S. students who in past years would have remained in the U.S. on temporary visas to move home.
“Some of the sheen has come off the U.S. economy as the place to make your fortune—especially if you’re from another country and have a U.S. education,” said Robert Litan, vice president of research and policy at the Kauffman Foundation. “They know all the hot things that are going in the United States, and see a real opportunity to replicate them or do something similar in their home country that doesn’t have it.”
According to data from the Brazilian government, U.S. applications for permanent work visas in Brazil rose 77 percent between 2008 and 2011, and temporary visas rose 36 percent during that time.
China and India have not released those same statistics, though other data point to growing numbers of American-educated individuals choosing to move to those countries. The Chinese Ministry of Education estimates that the number of Chinese living overseas who returned to China more-than tripled between 2007 and 2010 from 44,000 to 135,000.
Government officials in India say they’ve seen a steep rise in the number of people of Indian ancestry entering the country over the past several years. At least 100,000 Indians, including students returned in 2010, according to Alwyn Didar Singh, a former Secretary at the Ministry of Overseas Indian Affairs. “If one were to estimate, a majority of the professionals returning, as also students, would be from the US,” he told The Fiscal Times.
Litan says if the U.S. economy were growing at a 4 percent rate rather than the current rate of about 2 percent, the number of voluntary departures would likely decline. In contrast, India and China’s economies are expanding at around 7 percent.
The challenge for the U.S. is how to keep educated foreign students in the U.S. That would require overhauling immigration policies. Currently, if a foreign student wants to remain in the U.S. after graduation, he or she must be sponsored by an employer and apply for an H1B Visa. Those visas, which expire after six years, preclude foreigners from starting their own companies. To stay here, the worker must apply for a green card, which also requires sponsorship
The U.S. government caps the number of green cards available each year at 140,000, with every country limited to no more than 9,800.
There’s currently a massive backlog of Indian and Chinese workers who’ve applied for green cards. According to the National Foundation for American Policy, an immigration and trade think tank, the green card for educated workers from India is about 70 years.
For decades, bright students from abroad have had to contend with these stringent barriers, but decided it was worth the trouble since returning home wasn’t a very lucrative possibility, said Nick Schulz, a fellow at the American Enterprise Institute. “But now that they see growing opportunities in their native countries, the bureaucratic hassle is something they’re less inclined to put up with,” he said. “They have the option of going back to India or China and working at a great multinational company or starting their own. That really wasn’t the case 20 years ago.”
Schulz and other academics who study the subject including Vivek Wadhwa say these emergent patterns should serve as a wake-up call to lawmakers that the U.S. is not the world’s only brain magnet. According to Wadhwa, a fellow at Stanford’s Arthur and Toni Rembe Rock Center for Corporate Governance, a “brain drain” is already well-underway but the U.S. isn’t readily acknowledging or addressing it because as the world’s super power, it’s never had to. “We’re going to have other 'Silicon Valleys' to compete with in other countries, and it will be partly a problem of the U.S.’ own making,” Wadhwa said.
However, some experts say a growing stream of bright students exiting the states could channel advantages back to the U.S. “In countries that are gradually realizing their markets, having people stationed in companies abroad with knowledge of the U.S. could mean more potential openings to trade,” the Migration Policy Institute’s Sumption said.
And there’s no guarantee that American-educated professionals who take jobs abroad won’t return—especially if they grew up in the United States, Litan said. “It’s one thing to go abroad in your twenties when you are single, but I’d guess that a lot of these people will want to come back. And when that happens, they’ll be much better workers and entrepreneurs with the type of international experience U.S. employers value.”