There is ample evidence that migrants from India especially to advanced economies have a positive impact on India through means mentioned above. But what about second generation migrants who are born in advanced economies? It stands to reason that highly skilled parents provide better opportunities to their kids and consequently they are also reasonable skilled.
There was a recent report from Ministry of Foreign Affairs that they find it difficult to engage with second or third generation migrants. So above benefits which can largely be summed up as migrant's attachment with their home countries may not apply.
Having lived in Ireland for the last 25 years, I have been able to see how the Irish descendants in the US have had a significant part in promoting Ireland's tremendous economic growth, as well as supporting the peace process in Northern Ireland. But this was only possible because the Irish descendants have gained such a strong influence in the US. Maybe soon too for Indian descendants, such high profile in tech nowadays.
Ireland's tremendous economic growth was in no small part thanks to an advantageous corporate tax rate, compared especially to the US. This is not the only reason, but it placed a big part in why so many US corporations relocated their higher-end manufacturing (e.g., implantable medical devices) to Ireland. The transfer pricing of course made sure that all the profits were made in Ireland and the US sales maybe break even (some hyperbole on my part, but not that much). They raised the rate in 2021, so it's 20% less the deal that it had been. Not sure what impact this will have over the long run.
You are probably right! Increasing number of Indian origin people are getting into politics which will have positive impact on India's growth story in some way or another. Was really surprised to see two Indian origin people as Presidential candidate, especially from Republican party given that historically Indians have supported Democrats.
It doesn't matter how low the tax rates are, capital will never be happy. When I was in HK the corp tax rate was 15% (2004) and industrial law almost non existent compared to the west, but was business happy? No, tax too high and too much protection for workers!
Indeed, the low tax rate, as well as the well educated (mostly free 3rd level education) , English speaking population, and access to European market. However, I believe without inside access to US power, the Irish state wouldn't have taken the right decisions.
One of my biggest clients has both engineering (R&D) and manufacturing in Cork, and as such I have worked with a number of young Irish engineers and also engineers from other places who are transferred for a few years to Ireland. One Irish mechanical engineer I work with is a little older (he would have graduated in the 1990s) and he spent years travelling between Ireland and California, usually two weeks here/there type of deal. I asked him one time how he knew which side of the road to drive on, and he told me he just drove down the middle.
If the second generation likes eating Biryani and introduces it to their non-Indian friends they are still creating a new export market for Indian grown rice and spices, and are orders of magnitude more likely to come to India for tourism compared to the average American. All in all it seems that immigrants serve a role in lowering barriers to trade and business caused by cultural differences or information bottlenecks therefore allowing for more efficient allocation of resources between the two countries. At least that's how it's playing out between the US and India.
I've heard (not confirmed), that the thai government actually subsidizes people to go set up thai restaurants around the world to encourage exports of thai agricultural products and as a soft power tool to promote tourism.
I don't think India suffers from the same issue, hardly there is any major city anywhere in the world where you won't find Indian restaurants which is probably due to large diaspora spread around the world.
just giving an example of how Thailand with a tiny diaspora was able to match India's massive diaspora in terms of restaurants worldwide. This in effect acts as a sort of industrial policy where each thai restaurant serves to improve Thailand's agricultural exports and tourism.
Noah, love your work, but cannot disagree more on this one for at least two reasons. One, progressive taxation means lot less capital available for investment at the national level. More critically, innovation is heavily concentrated in a handful of talented / hardworking / lucky individuals- if they leave your productivity growth plummets and you end up losing ground over time. And yes I do think you can see those effects at scale - Russia a prime example. You can also talk about third order effects of cultural composition - if emigrants are disproportionately from educated / liberal / open milieu, the society left behind becomes a lot more closed / zero sum / reactionary - turning the country into a less than productive member of the global community.
If you believe that innovative capacity can be learned, then the "brain gain" that results from high-skilled emigration more than cancels out the loss from the folks who leave! At least in large, poor countries.
Something similar happened in Ireland which became increasingly conservative in a period of emigration and is one of the reasons for the 1983 constitutional changes which were subsequently reversed a few decades later.
Indeed it is, but a central plank of that revival was a determination of government to build an economy to keep its young people. It's absolutely at the heart of the Irish economic story and obsesses their policy makers. Find me a senior government minister in Ireland who celebrates persistent emigration.
What's funny is this perfectly reveals how expedient the rationalization in these liberal "thought" pieces are. When talent supposedly leaves RU, the country is doomed, but of course when it leaves India to benefit the US, it's the most wonderful thing ever.
The revealing part is everyone perfectly understands how this works, but Noah et al will certainly never admit it for obvious reasons, and his followers follow liberally because of it.
I mean, there are clearly strong securitized barriers between the US and Russia that prevent all of the positive business interactions which could help russia from taking place between the two.
Aug 13, 2023·edited Aug 13, 2023Liked by Noah Smith
Great post! I'll definitely be sharing this with several people I've had discussions about this topic with.
I'd like to present a few counterpoints, though:
1) Many of the positive effects attributed to immigration, such as brain circulation and the motivation for locals to strive for education, hinge on the premise that the country has a sufficient number of young people and, generally, an excess of workers. While this holds true for many economically disadvantaged countries at the moment, it's certainly not the case for countries with average wealth, education levels, and technological development, such as Eastern European nations.
2) In your introductory examples (which I understand were meant to illustrate key principles only), some significant effects are omitted. Individuals within a country aren't isolated agents but rather integral parts of a solidarity-based community linked by taxes and welfare systems. Additionally, in such a community, the less productive or less educated individuals could become even less productive if their educated and productive co-workers, managers, and educators decide to leave.
3) The ability to simply leave a situation can sometimes diminish the incentive to advocate for policy changes at home. While leaving an unfavourable environment is be a prudent choice from an individual's perspective, it might not be advantageous for society as a whole. Nonetheless, it's worth noting that emigrants can also serve as a dissident base and introduce fresh ideas into their native society through re-immigration and continued contacts. Thus, this issue presents a double-edged sword.
It would be great if you could tackle some steelmanned arguments regarding negative effects on the emigration country in another post, since they tend to be quite persuasive from my experience!
(1) is true, that's why skilled immigration should focus on larger countries rather than smaller ones.
(2) might be true, but doesn't brain gain negate this?
(3) seems like an argument more related to the national security competition thing...and at that point we have to ask whether we'd prefer a rival country to become an echo chamber or not...and I'm not sure we know the answer to that!
I am a citizen of Bulgaria. The export of almost 1 million people out of a total of 9 million had a catastrophic effect on our country. Therefore, I argue that the game is not zero-sum. The benefits are primarily for the more developed countries. A modern type of colonialism.
My wording applies to all former socialist countries - Russia, Ukraine, Lithuania, Latvia, Estonia, Slovakia, Slovenia, Romania, Bulgaria, etc. It is not a "small country" but the collapse of the demographic, economic, natural and scientific systems of these countries. Respect for your smart thoughts which I observe and enjoy.
It is one thing to criticize the theoretical result. But to say it is "a modern type of colonialism" is to treat people like a natural resource, that is, as if they were property. It asserts that countries have the right to force people to stay in a particular location just to benefit others. That is a pretty dark and totalitarian vision. Why not take it to the logical limit and let people imprison their domestic workers to prevent them from leaving and making their child care more expensive?
More generally, it is a little odd to say that not *stopping* people from moving to your country is "colonialism".
It's not exactly like that! If "detaining people in the country" is totalitarian, then what does it mean to detain people at the border, letting in only qualified personnel as migrants?! Therefore: the donor country has invested about 50,000 euros in the development of one child (from 0 to 18 years), and the host country receives it for free? It's either theft or neo-colonialism.
If this data is accurate, Bulgaria has gone from 9 million in 1986 to 6.7M in 2023, and projected to continue to drop to 3 million by the end of this century. Seems to be the same trend for most all the former Soviet satellite states. Ukraine was once 51.5M, and projected to drop down to 20M by the end of this century. https://worldpopulationreview.com/countries/ukraine-population
The Baltics are also emptying out with no end in sight. See ya later Serbia.
According to the data (if accurate) this is not just from net outflow emigration, but also from birthrates well below those needed to maintain the population.
Based on the silence attending crashing TFRs (and banking on low-IQ immigration as a "solution" to population decline), it seems you're one of the very few to make that particular journey down "the hole" and survive to talk about it.
Very accurate comment, thank you! People in the West probably think that people in the East lived in concentration camps guarded by red tyrannosaurs!... I accept Angela Merkel's opinion as accurate: "People in the West still can't believe that people in the East had a good life ". This is the truth without idealizing it!
The catastrophe occurred with Gorbachev's crazy ideas to bring capitalism into socialism - each for himself and the rest - to hell!
The severing of economic ties (based on the model of Vasily Leontiev in our countries) proved to be fatal for the economy and for the citizens of our countries. And Gorbachev became a hero in pizza commercials...
Well, I'm not a big fan of that either. But we pretty regularly distinguish between not letting someone in to a place and to not letting someone leave a place. To take an example, I think most people would intuitively see the difference between not letting a person into a gated community versus not letting someone leave a gated community. The first sounds snobbish, the second like a prison. (I don't think a house or a gated community is a great analogy for a country in the receiving side, as everyone inside in those examples consents to the restriction, whereas the same isn't true in a country. But I don't see much of an objection to using it on the leaving side since in both cases there is someone who wants to leave.) Similarly, I think most people would see a big difference from disqualifying you from serving in the army (not letting you in) and conscripting you (not letting you leave).
If your concern is money, then have the person leaving pay it back. Less, of course, all the taxes that they paid. That's certainly a much lesser infringement of their freedom than is forbidding them from leaving altogether. If I recall correctly, I think this is actually what the Philippines did: loaned studying nurses money and then forgave it if they practiced in the country for a certain period. The overall idea is to try to coerce people as little as possible.
But more generally, the language you are using suggests that people are property of the state, and they aren't. You can't "steal" a person from a country, because a country doesn't own a person.
I do not claim that people are the property of the state, but they are elements of the social system of any state.
You know what "lost benefits" means, I hope. Bulgaria has lost more than 400 billion dollars from those who left the country. The situation is the same in Lithuania, Latvia and Estonia. "Buy people with better salaries, don't think about the consequences for the countries!".
Ukraine is already in the same situation - the vast majority of the migrated people will never return to this broken country. What "restoration of Ukraine" are we talking about then - the future profits of transnational corporations?!
Well, yeah, these economic analyses treat people like a natural resource, thus not taking into account reproduction and the messy result that the kids might not be so highly skilled; creation of ethnic enclaves; etc. And if the kids are higher skilled than the natives, you start to get a ruling over-caste with those attendant problems. Better in the long run to import stuff, not people.
Noah writes some great stuff, but he has a real blind spot for areas blighted by emigration.
Simply standing or passing by some of the derelict areas of the US would confirm that there are real downsides to emigration, even within a nation. Irelands history and many of its difficulties are due to emigration. Similarly for the regions of the UK that lost their economic purpose.
I just don't think it's possible to write a piece like this if you have spent even a few months in a place that has lost a lot of its young and energetic people.
I've long been an advocate for place-based policy in the U.S. to revitalize declining areas. I just don't think some kind of hukou system that keeps people tied to the town of their birth is a good example of a place-based policy!!
I don't advocate forcing people to remain in a place they don't want to be, but crafting policy to ensure growth and opportunity is available in sagging regions explicitly requires a recognition of the damage loss of people has in a locale.
UK government policy in the 80s and 90s are a very good example of the long-term disaster of an immigration (and emigration) free-for-all, that has left a massively lopsided economy compared to that of a generation ago. Correcting this will require reinvigorating regions with the explicit aim of ensure sufficient opportunity and public goods so people don't move.
And incidentally, this is one of the reasons I now rarely describe myself as a liberal: the negation of the importance of place, community and a broader social dimension.
Aren't many of the problematic areas in the UK (such as the English "Red Wall" which voted strongly for Brexit) basically the former coalfields, which never really had anything going for them other than that they were where the coal was, which became irrelevant once the world started moving away from coal for climate reasons?
Britain (and England in particular) is a relatively small country which is very densely populated. The loss of coal in and of itself need not have led to the dereliction of these areas if the government had not pursued a strategy of free market neglect.
Coal areas are only a small part of the Red Wall. The bigger loss was the hollowing of manufacturing, which has been the true disaster for the UK more broadly and didn't need to happen.
Isn't deindustrialization very difficult to prevent within a common market though? Note how (if we expand our area of interest from the UK to Europe) it has become clear that Europe's manufacturing has become increasingly concentrated in Germany.
Maybe, but does it really? We diagnose region R and having become poorer say because of some technical change that reduced demand for labor in the region. And people emigrated. How does "recognizing" the loss from emigration (compared to the people not having emigrated) affect the development of a policy to help region R? I'm saying that emigration may be more a symptom of a problem than the cause of the problem.
Yes emigration is a symptom. But if you see a problem, try and fix it, surely?
So if people leave because a country fails to grow economically or due to relentless corruption, the leaders in that area should recognise that problem and try to address it. No political leader worth their salt within such a region should simply say, 'oh well they're better off somewhere else' or 'how lucky we are that they have left'.
How has the dereliction of central Detroit helped central Detroit? Or likewise Appalachia?
In the UK coal mining areas for example, the issue was that those with the political power and tax revenue to act on the problem were in London so were never more than half-hearted (if not ideologically opposed) to looking into and resolving the problem.
I don't pretend to be objective because I have based my position on observation of the reality, not a model.
What is the label of your political home then? Conservatives certainly don’t place any importance on those values beyond their use in rhetoric. They for example were right there with economic liberals in pushing for free trade with no commensurate bulking of the social safety net.
Big topic, but I'd argue that "trade" policy had little to do with Damon-Acemoglu type regional damage. "Globalization" was mainly driven by a) containerization and communication to allow managing offshoring of mid-skill manufacturing, b) secular overvaluation of the dollar because of US fiscal deficits (the "twin deficits" effect) which shifts relative prices in favor of producing non-tradeable goods like many manufactures over tradeable goods and c) policies in other countries that made them better able to export manufactures to the US.
I will allow one US "trade" policy which was in international negotiations we prioritized getting trading partners to reduce restrictions on our service exports by protecting US copyright, trademarks, intellectual property over restriction on our manufactured exports.
[Sure we could have used trade policy to prevent technology and other country liberalization from leading to greater trade in manufactured goods, but that not what most people seem to mean when they point to NAFTA or the "China shock."
Interesting. You’re obviously far more knowledgeable about this area than I am. What is true, at least in Canada, is that when this dynamic was playing out the elite also cut the social safety net when they should’ve been doing the exact opposite. A better managed transition would’ve saved a lot of suffering.
The is something to this argument -- Noah explicitly modeled it -- but from the source nation point of view you also need to look at the counterfactual. How much would the potential emigrant have contributed if they had stayed? The extreme case is the (true) asylum seeker. They leave precisely because they will not be allowed to contribute to the source country. In a way this is just a special case of the gains from trade argument. The first best policy would be for the source country to remove the causes that make people need to emigrate.
Hello! Thank you for your intelligent question!... The main reasons for the departure of 1 million people from Bulgaria were two: first, the collapse of the Council for Mutual Economic Assistance (CMEA) after 1990 severed the economic and social ties between the former member countries, leaving almost 2/3 of working people (and excellently equipped enterprises) without good incomes; secondly, the illusion that work and living conditions in the West are much better than in our country also had a strong influence. My family and I got US green cards, we lived in America for a few years, but our learning was huge when we realized that the American standard of living is in many ways lower than in our native country. And, of course, we returned forever (I am now a professor emeritus) to Bulgaria. One more thing, regardless of the statistics, in our country a large number of people live better than in other countries of the European Union. Paid annual leave 20 working days; paid maternity leave for 2 years; a huge part of Bulgarians own their own (paid for) homes; go on vacation abroad, etc. Without idealizing, Bulgaria has a huge problem - corruption. You may be surprised, but the main corrupt practices were imported by the businessmen from the USA and the EU.
Now Bulgaria "imports" the most Ukrainians to fill labor deficits. The war in Ukraine turned out to be a great boon for European business: on the one hand, GDP grew through arms exports; on the other hand, GDP grows because we exploit foreign (Ukrainian) resources.
An economy of chaos and uncertainty, unfortunately. And the golden words "demoocracy" and "market economy" turned out to be another fake.
One more effect you have not covered is complementarity. I.e. a Satya who remained in India would be less productive than Satya in the U.S. due to the presence of others with complementary skills here. This is a net add to the global GDP by improving productivity.
Oh definitely. I just assumed this in Model 3. The way this helps the sending country is the same, though -- linkages of trade, tech transfer, investment, and so on!
Complementarity ameliorates your small country exception - a "Satya" would not be the skilled Satya there, absent the learning effects due to his complementary colleagues. Hence the loss due to his emigration would be smaller.
Yes, its gains from trade, but they are much more powerful when complementarity of skills is involved (the factor behind agglomeration effects). Now, with remote work technology, this means that the emigrant can in effect extend complementarity to their home countries. I think this is why eg semiconductor design teams can be in India even sans actual production.
How would the Smallonia models change if a progressive tax policy is added? Intuitively at least in Model 1 the two poorer Dmallonians who are staying behind might struggle to keep their government services and infrastructure intact.
IMO, none of this matters though. Individuals matters, not countries. Maybe it's best for everyone to leave Smallonia and we can turn it into a wildlife refuge.
Your last sentence reminded me of when I suggested to someone that Nauru could be abandoned when the phosphates ran out (with its population resettled in Australia): he suggested the best use for it afterwards would be as a bombing range for the RAAF...
This is, of course, commonse & I've been trying, unsuccessfully, to explain this to Labour supporters etc when they close their ears to distinguishing between asylum seekers & economic migrants. They simply do not want to know that most of us are very open to employing talented immigrants while deploring our desire to block those that are here for the benefits or working illegally.
"If you think of Smallonia as just Mark and Sofia... their living standards are completely unchanged"
"If you think of Smallonia as Mia, Mark, and Sofia... their living standards are also unchanged"
If we think of Smallonia as a collective of "all citizens of Smallonia" (which is how most normal people think of their country), then the living standards of Mark and Sofia are seriously affected by the exit of their most productive (and likely consumptive) member. And for an economist, you're remarkably blasé about the 50% shrinkage in Smallonia's GDP. Also, skilled immigrants are rarely subsistence farmers.
"It’s very hard to know, on balance, which of these are happening, and how much."
That's why this is an issue that best decided by voters instead of economists.
I agree with you that America should import more skilled immigrants. And fewer unskilled ones. And especially fewer illegal ones. But it's because those are good policies for Americans. While I do care what happens to Smallonia in some abstract sense, I care what happens to America more.
Yes. It is. Which is why we don't do it. One party sees illegals as new voters. The other sees them as cheap labor. Neither sees them as competition, since neither is particularly interested in non-college-educated voters right now. If the GOP is able to complete it's transition to a working-class party, that may change.
Illegal immigrants can't vote (pretty much by definition): don't you mean that the Republicans see illegal immigrants as cheap labor, while the Democrats (or at least a vocal minority of them) don't want to enforce immigration laws because they believe in open borders?
And isn't it more correct to say that the Democrats are only interested in college-educated voters while the Republicans are only interested in property-owning voters?
The fact that they can't vote today is irrelevant; the more that are here the greater will be the pressure to "normalize" them, which just means set them on a path to citizenship and (as the Dems see) future Democratic voting. I'm not sure they're actually right about this, but it is how they see the world. The Dems have convinced themselves that black and brown people can will never abandon the Party, so they now spend their time courting wealthy, highly educated whites, ignoring the fact that their interests are often diametrically opposed to those of working-class black and brown people.
I think you're right about the old GOP, and when Josh Hawley announced last year that "the GOP is a working class party now", he was somewhat premature. The GOP is struggling to realign itself in a working class direction. My view is it will either succeed or be replaced. A working class (70%+ of the population) without a political vehicle is a potential power center too lucrative to last long. The Left has abandoned them and is now sowing division by race and sex and other weird criteria essentially to keep them from developing class solidarity. This will not work. Eventually the races will realize that Anthony Oliver and black hip hop share a common, class-based, lament. Either the GOP will embrace them all, or someone new will. Personally, I hope the GOP does, since I fear that a "someone new" might well be a true demagogue (whether Left or Right variety.) For a preview of what that could look like, look at Latin America. If you thought Bernie and/or Trump were extreme, you ain't seen nothing yet. Pray that the GOP pulls its head out of it's butt and figures this out.
So what you’re saying is that people overseas trying to immigrate to the US are like American kids trying to get really good at basketball so they can become an NBA star. Statistically, basically no one is going to make it into the NBA, but a lot of people are going to get really good at basketball.
Sitting in India, having considered emigrating once myself, and now planning the same option for my kids with every discretionary cent I have, I cannot disagree with the overall premise and conclusions of your article. India has seen plenty of hard benefits (largest recipient of inward remittance, booming IT sector, etc) and softer pluses (more professional work culture, less dominance of the traditionally 'business' castes in every sector, etc). Far from trying to plug people emigrating, policy makers have long switched to woo their services and investments actively when the diaspora visit India during their December break.
Having said that, need to point out a few nuances - this notion of 'big' and 'small' countries is simplistic. While India has a youthful population and 1.4B people in all, there is a very small cream that has the educational skills, the risk-taking mindset, the ability to work with uncertain policy, the ability to attract talent and all the other skills required to drive entrepreneurship and boost Indian GDP if they sit here. When these guys emigrate (and they do, in large numbers), the country loses much more than just their tax revenue.
As others have pointed out, the possibility of 'lemons' being left behind in the country is increased. While there are a few who have stayed back in the country for patriotic reasons, most others from the top universities only stayed back because they could not get the best universities or jobs in the first world. So the 'cream' was / is being lost. Punjab state is a great example of this.
A third fallout I have seen is creation of asset bubbles by the diaspora, especially in real estate. Too many ghost houses and societies have flats owned by non-residents who never show up.
In sum, over a longer period, I think these negatives get mitigated and the positives outweigh them. Yet, it maybe useful to think of specific countermeasures to the above problems - for e.g. a structured programme to bring back diaspora who have spent 10-25 years in the first world, to come back and setup a business back here.
I've always gotten the vibe that the "brain drain" argument in the US is mainly made by people who are opposed to immigration anyway (they do not agree with the gains from trade view) and are looking for a way to shame the pro-immigration folks. It reminds me of the NIMBYs who bemoan "gentrification" or climate deniers who lament the environmental impact of EV production.
BTW, there is another human capital argument that could be relevant. It might be that the poorer country has a comparative advantage in forming "early stage" human capital (say through high school/university which might mean a small loss to the source country, although this is hard to disentangle from the incentive effects of people in source countries "overinvesting" in education on the long shot of being able to emigrate which could be a benefit to the source country.
Trotsky whimsically predicted that America would be the location of a multiracial eugenics creating "a new breed of men – the first worthy of the name of Man". Though only after adopting communism:
Let's make the toy example from before a little more realistic. As before, Mia, Mark and Sofia have the following incomes:
Mia: 100
Mark: 60
Sofia: 50
Let's further assume that Mia is a software engineer that could work anywhere in the world for a similar salary, Sofia is a local farmer, and Mark is retired and the income is a government provided pension. Mark's pension is financed by taxing Mia 50 and Sofia 10. What happens when Mia moves from Greece to Switzerland is left as an exercise to the reader. But it's not pretty.
Maybe Smallonia should not assume that Mia exists solely to be Mark's personal tax cattle? Perhaps they need to govern in a manner that recognizes Mia may get tired of being milked so much, and has left to graze the greener pastures of Switzerland. Or, they they can go full on communist East Germany and shoot Mia in the back of the head if she tries to leave so as to discourage other tax cattle from doing the same.
Kind of works if you have a community and social cohesion where Mia gets a similar pension, supported by Milla, the next citizen delivered from the people lab. And Milla then is assured of a similar track.
There is ample evidence that migrants from India especially to advanced economies have a positive impact on India through means mentioned above. But what about second generation migrants who are born in advanced economies? It stands to reason that highly skilled parents provide better opportunities to their kids and consequently they are also reasonable skilled.
There was a recent report from Ministry of Foreign Affairs that they find it difficult to engage with second or third generation migrants. So above benefits which can largely be summed up as migrant's attachment with their home countries may not apply.
True! But still probably more likely than the average American to take an interest in India.
Having lived in Ireland for the last 25 years, I have been able to see how the Irish descendants in the US have had a significant part in promoting Ireland's tremendous economic growth, as well as supporting the peace process in Northern Ireland. But this was only possible because the Irish descendants have gained such a strong influence in the US. Maybe soon too for Indian descendants, such high profile in tech nowadays.
Ireland's tremendous economic growth was in no small part thanks to an advantageous corporate tax rate, compared especially to the US. This is not the only reason, but it placed a big part in why so many US corporations relocated their higher-end manufacturing (e.g., implantable medical devices) to Ireland. The transfer pricing of course made sure that all the profits were made in Ireland and the US sales maybe break even (some hyperbole on my part, but not that much). They raised the rate in 2021, so it's 20% less the deal that it had been. Not sure what impact this will have over the long run.
You are probably right! Increasing number of Indian origin people are getting into politics which will have positive impact on India's growth story in some way or another. Was really surprised to see two Indian origin people as Presidential candidate, especially from Republican party given that historically Indians have supported Democrats.
Any resource which details this emerging trend? I had recently heard that greater number of people are flocking towards Texas.
You're pretty much showed the reason for the Irish "miracle"! Lower corporate tax rate. Singapore, anyone?
It's almost as if money travels to where it is welcome and flees from where it is confiscated.
It doesn't matter how low the tax rates are, capital will never be happy. When I was in HK the corp tax rate was 15% (2004) and industrial law almost non existent compared to the west, but was business happy? No, tax too high and too much protection for workers!
Indeed, the low tax rate, as well as the well educated (mostly free 3rd level education) , English speaking population, and access to European market. However, I believe without inside access to US power, the Irish state wouldn't have taken the right decisions.
To put it in perspective, out of the 70 graduates in mechanical engineers in 1994 in Dublin, 3 stayed in Ireland.
One of my biggest clients has both engineering (R&D) and manufacturing in Cork, and as such I have worked with a number of young Irish engineers and also engineers from other places who are transferred for a few years to Ireland. One Irish mechanical engineer I work with is a little older (he would have graduated in the 1990s) and he spent years travelling between Ireland and California, usually two weeks here/there type of deal. I asked him one time how he knew which side of the road to drive on, and he told me he just drove down the middle.
If the second generation likes eating Biryani and introduces it to their non-Indian friends they are still creating a new export market for Indian grown rice and spices, and are orders of magnitude more likely to come to India for tourism compared to the average American. All in all it seems that immigrants serve a role in lowering barriers to trade and business caused by cultural differences or information bottlenecks therefore allowing for more efficient allocation of resources between the two countries. At least that's how it's playing out between the US and India.
I've heard (not confirmed), that the thai government actually subsidizes people to go set up thai restaurants around the world to encourage exports of thai agricultural products and as a soft power tool to promote tourism.
I don't think India suffers from the same issue, hardly there is any major city anywhere in the world where you won't find Indian restaurants which is probably due to large diaspora spread around the world.
just giving an example of how Thailand with a tiny diaspora was able to match India's massive diaspora in terms of restaurants worldwide. This in effect acts as a sort of industrial policy where each thai restaurant serves to improve Thailand's agricultural exports and tourism.
Noah, love your work, but cannot disagree more on this one for at least two reasons. One, progressive taxation means lot less capital available for investment at the national level. More critically, innovation is heavily concentrated in a handful of talented / hardworking / lucky individuals- if they leave your productivity growth plummets and you end up losing ground over time. And yes I do think you can see those effects at scale - Russia a prime example. You can also talk about third order effects of cultural composition - if emigrants are disproportionately from educated / liberal / open milieu, the society left behind becomes a lot more closed / zero sum / reactionary - turning the country into a less than productive member of the global community.
If you believe that innovative capacity can be learned, then the "brain gain" that results from high-skilled emigration more than cancels out the loss from the folks who leave! At least in large, poor countries.
Something similar happened in Ireland which became increasingly conservative in a period of emigration and is one of the reasons for the 1983 constitutional changes which were subsequently reversed a few decades later.
Indeed. Imagine what stealing other nations taxes can do.
Seems more moral than the raping and pillaging that has historically accompanied the tax theft.
Indeed it is, but a central plank of that revival was a determination of government to build an economy to keep its young people. It's absolutely at the heart of the Irish economic story and obsesses their policy makers. Find me a senior government minister in Ireland who celebrates persistent emigration.
Following the Constitutional changes, more openness to immigration and an international ecosystem of digital industries that favors English speakers.
Read Fintan O'Toole on the era. In his view what turned Ireland around was the Great Recession which exposed foolhardy policy choices and corrupton.
> Russia a prime example
What's funny is this perfectly reveals how expedient the rationalization in these liberal "thought" pieces are. When talent supposedly leaves RU, the country is doomed, but of course when it leaves India to benefit the US, it's the most wonderful thing ever.
The revealing part is everyone perfectly understands how this works, but Noah et al will certainly never admit it for obvious reasons, and his followers follow liberally because of it.
I mean, there are clearly strong securitized barriers between the US and Russia that prevent all of the positive business interactions which could help russia from taking place between the two.
Great post! I'll definitely be sharing this with several people I've had discussions about this topic with.
I'd like to present a few counterpoints, though:
1) Many of the positive effects attributed to immigration, such as brain circulation and the motivation for locals to strive for education, hinge on the premise that the country has a sufficient number of young people and, generally, an excess of workers. While this holds true for many economically disadvantaged countries at the moment, it's certainly not the case for countries with average wealth, education levels, and technological development, such as Eastern European nations.
2) In your introductory examples (which I understand were meant to illustrate key principles only), some significant effects are omitted. Individuals within a country aren't isolated agents but rather integral parts of a solidarity-based community linked by taxes and welfare systems. Additionally, in such a community, the less productive or less educated individuals could become even less productive if their educated and productive co-workers, managers, and educators decide to leave.
3) The ability to simply leave a situation can sometimes diminish the incentive to advocate for policy changes at home. While leaving an unfavourable environment is be a prudent choice from an individual's perspective, it might not be advantageous for society as a whole. Nonetheless, it's worth noting that emigrants can also serve as a dissident base and introduce fresh ideas into their native society through re-immigration and continued contacts. Thus, this issue presents a double-edged sword.
It would be great if you could tackle some steelmanned arguments regarding negative effects on the emigration country in another post, since they tend to be quite persuasive from my experience!
(1) is true, that's why skilled immigration should focus on larger countries rather than smaller ones.
(2) might be true, but doesn't brain gain negate this?
(3) seems like an argument more related to the national security competition thing...and at that point we have to ask whether we'd prefer a rival country to become an echo chamber or not...and I'm not sure we know the answer to that!
I am a citizen of Bulgaria. The export of almost 1 million people out of a total of 9 million had a catastrophic effect on our country. Therefore, I argue that the game is not zero-sum. The benefits are primarily for the more developed countries. A modern type of colonialism.
Bulgaria is a small country, so this is possible.
But not in Smallonia...?
It is possible in Smallonia! (Which of course is just another spelling of Estonia...)
My mistake...I read it as a stand-in for Elbonia, where NO immigration or emigration is either requested or allowed.
My wording applies to all former socialist countries - Russia, Ukraine, Lithuania, Latvia, Estonia, Slovakia, Slovenia, Romania, Bulgaria, etc. It is not a "small country" but the collapse of the demographic, economic, natural and scientific systems of these countries. Respect for your smart thoughts which I observe and enjoy.
Most of these countries have developed rapidly since the end of the cold war though.
It is one thing to criticize the theoretical result. But to say it is "a modern type of colonialism" is to treat people like a natural resource, that is, as if they were property. It asserts that countries have the right to force people to stay in a particular location just to benefit others. That is a pretty dark and totalitarian vision. Why not take it to the logical limit and let people imprison their domestic workers to prevent them from leaving and making their child care more expensive?
More generally, it is a little odd to say that not *stopping* people from moving to your country is "colonialism".
It's not exactly like that! If "detaining people in the country" is totalitarian, then what does it mean to detain people at the border, letting in only qualified personnel as migrants?! Therefore: the donor country has invested about 50,000 euros in the development of one child (from 0 to 18 years), and the host country receives it for free? It's either theft or neo-colonialism.
You comment took me down a rabbit hole:
https://worldpopulationreview.com/countries/bulgaria-population
If this data is accurate, Bulgaria has gone from 9 million in 1986 to 6.7M in 2023, and projected to continue to drop to 3 million by the end of this century. Seems to be the same trend for most all the former Soviet satellite states. Ukraine was once 51.5M, and projected to drop down to 20M by the end of this century. https://worldpopulationreview.com/countries/ukraine-population
The Baltics are also emptying out with no end in sight. See ya later Serbia.
According to the data (if accurate) this is not just from net outflow emigration, but also from birthrates well below those needed to maintain the population.
It's not just former commie countries that have this projected population collapse. South Korea, anyone? https://worldpopulationreview.com/countries/south-korea-population. Entirely based on their lowest-in-the-world birthrate (less than one baby per woman).
Based on the silence attending crashing TFRs (and banking on low-IQ immigration as a "solution" to population decline), it seems you're one of the very few to make that particular journey down "the hole" and survive to talk about it.
Very accurate comment, thank you! People in the West probably think that people in the East lived in concentration camps guarded by red tyrannosaurs!... I accept Angela Merkel's opinion as accurate: "People in the West still can't believe that people in the East had a good life ". This is the truth without idealizing it!
The catastrophe occurred with Gorbachev's crazy ideas to bring capitalism into socialism - each for himself and the rest - to hell!
The severing of economic ties (based on the model of Vasily Leontiev in our countries) proved to be fatal for the economy and for the citizens of our countries. And Gorbachev became a hero in pizza commercials...
Well, I'm not a big fan of that either. But we pretty regularly distinguish between not letting someone in to a place and to not letting someone leave a place. To take an example, I think most people would intuitively see the difference between not letting a person into a gated community versus not letting someone leave a gated community. The first sounds snobbish, the second like a prison. (I don't think a house or a gated community is a great analogy for a country in the receiving side, as everyone inside in those examples consents to the restriction, whereas the same isn't true in a country. But I don't see much of an objection to using it on the leaving side since in both cases there is someone who wants to leave.) Similarly, I think most people would see a big difference from disqualifying you from serving in the army (not letting you in) and conscripting you (not letting you leave).
If your concern is money, then have the person leaving pay it back. Less, of course, all the taxes that they paid. That's certainly a much lesser infringement of their freedom than is forbidding them from leaving altogether. If I recall correctly, I think this is actually what the Philippines did: loaned studying nurses money and then forgave it if they practiced in the country for a certain period. The overall idea is to try to coerce people as little as possible.
But more generally, the language you are using suggests that people are property of the state, and they aren't. You can't "steal" a person from a country, because a country doesn't own a person.
Thanks for your knowledgeable comment!
I do not claim that people are the property of the state, but they are elements of the social system of any state.
You know what "lost benefits" means, I hope. Bulgaria has lost more than 400 billion dollars from those who left the country. The situation is the same in Lithuania, Latvia and Estonia. "Buy people with better salaries, don't think about the consequences for the countries!".
Ukraine is already in the same situation - the vast majority of the migrated people will never return to this broken country. What "restoration of Ukraine" are we talking about then - the future profits of transnational corporations?!
And that there is neocolonialism, come and see.
𝘉𝘶𝘵 𝘵𝘰 𝘴𝘢𝘺... 𝘪𝘴 𝘵𝘰 𝘵𝘳𝘦𝘢𝘵 𝘱𝘦𝘰𝘱𝘭𝘦 𝘭𝘪𝘬𝘦 𝘢 𝘯𝘢𝘵𝘶𝘳𝘢𝘭 𝘳𝘦𝘴𝘰𝘶𝘳𝘤𝘦
Well, yeah, these economic analyses treat people like a natural resource, thus not taking into account reproduction and the messy result that the kids might not be so highly skilled; creation of ethnic enclaves; etc. And if the kids are higher skilled than the natives, you start to get a ruling over-caste with those attendant problems. Better in the long run to import stuff, not people.
Noah writes some great stuff, but he has a real blind spot for areas blighted by emigration.
Simply standing or passing by some of the derelict areas of the US would confirm that there are real downsides to emigration, even within a nation. Irelands history and many of its difficulties are due to emigration. Similarly for the regions of the UK that lost their economic purpose.
I just don't think it's possible to write a piece like this if you have spent even a few months in a place that has lost a lot of its young and energetic people.
I've long been an advocate for place-based policy in the U.S. to revitalize declining areas. I just don't think some kind of hukou system that keeps people tied to the town of their birth is a good example of a place-based policy!!
Sure, but you can't really be liberal if you favor forcibly tying down the young and energetic to a locale they would rather not choose to be.
I don't advocate forcing people to remain in a place they don't want to be, but crafting policy to ensure growth and opportunity is available in sagging regions explicitly requires a recognition of the damage loss of people has in a locale.
UK government policy in the 80s and 90s are a very good example of the long-term disaster of an immigration (and emigration) free-for-all, that has left a massively lopsided economy compared to that of a generation ago. Correcting this will require reinvigorating regions with the explicit aim of ensure sufficient opportunity and public goods so people don't move.
And incidentally, this is one of the reasons I now rarely describe myself as a liberal: the negation of the importance of place, community and a broader social dimension.
Aren't many of the problematic areas in the UK (such as the English "Red Wall" which voted strongly for Brexit) basically the former coalfields, which never really had anything going for them other than that they were where the coal was, which became irrelevant once the world started moving away from coal for climate reasons?
Britain (and England in particular) is a relatively small country which is very densely populated. The loss of coal in and of itself need not have led to the dereliction of these areas if the government had not pursued a strategy of free market neglect.
Coal areas are only a small part of the Red Wall. The bigger loss was the hollowing of manufacturing, which has been the true disaster for the UK more broadly and didn't need to happen.
Isn't deindustrialization very difficult to prevent within a common market though? Note how (if we expand our area of interest from the UK to Europe) it has become clear that Europe's manufacturing has become increasingly concentrated in Germany.
Maybe, but does it really? We diagnose region R and having become poorer say because of some technical change that reduced demand for labor in the region. And people emigrated. How does "recognizing" the loss from emigration (compared to the people not having emigrated) affect the development of a policy to help region R? I'm saying that emigration may be more a symptom of a problem than the cause of the problem.
Yes emigration is a symptom. But if you see a problem, try and fix it, surely?
So if people leave because a country fails to grow economically or due to relentless corruption, the leaders in that area should recognise that problem and try to address it. No political leader worth their salt within such a region should simply say, 'oh well they're better off somewhere else' or 'how lucky we are that they have left'.
How has the dereliction of central Detroit helped central Detroit? Or likewise Appalachia?
In the UK coal mining areas for example, the issue was that those with the political power and tax revenue to act on the problem were in London so were never more than half-hearted (if not ideologically opposed) to looking into and resolving the problem.
I don't pretend to be objective because I have based my position on observation of the reality, not a model.
What is the label of your political home then? Conservatives certainly don’t place any importance on those values beyond their use in rhetoric. They for example were right there with economic liberals in pushing for free trade with no commensurate bulking of the social safety net.
Big topic, but I'd argue that "trade" policy had little to do with Damon-Acemoglu type regional damage. "Globalization" was mainly driven by a) containerization and communication to allow managing offshoring of mid-skill manufacturing, b) secular overvaluation of the dollar because of US fiscal deficits (the "twin deficits" effect) which shifts relative prices in favor of producing non-tradeable goods like many manufactures over tradeable goods and c) policies in other countries that made them better able to export manufactures to the US.
I will allow one US "trade" policy which was in international negotiations we prioritized getting trading partners to reduce restrictions on our service exports by protecting US copyright, trademarks, intellectual property over restriction on our manufactured exports.
[Sure we could have used trade policy to prevent technology and other country liberalization from leading to greater trade in manufactured goods, but that not what most people seem to mean when they point to NAFTA or the "China shock."
Interesting. You’re obviously far more knowledgeable about this area than I am. What is true, at least in Canada, is that when this dynamic was playing out the elite also cut the social safety net when they should’ve been doing the exact opposite. A better managed transition would’ve saved a lot of suffering.
This is a bit off topic, but I'm no conservative either.
Was just curious.
The is something to this argument -- Noah explicitly modeled it -- but from the source nation point of view you also need to look at the counterfactual. How much would the potential emigrant have contributed if they had stayed? The extreme case is the (true) asylum seeker. They leave precisely because they will not be allowed to contribute to the source country. In a way this is just a special case of the gains from trade argument. The first best policy would be for the source country to remove the causes that make people need to emigrate.
What was the primary driver of people leaving Bulgaria?
Hello! Thank you for your intelligent question!... The main reasons for the departure of 1 million people from Bulgaria were two: first, the collapse of the Council for Mutual Economic Assistance (CMEA) after 1990 severed the economic and social ties between the former member countries, leaving almost 2/3 of working people (and excellently equipped enterprises) without good incomes; secondly, the illusion that work and living conditions in the West are much better than in our country also had a strong influence. My family and I got US green cards, we lived in America for a few years, but our learning was huge when we realized that the American standard of living is in many ways lower than in our native country. And, of course, we returned forever (I am now a professor emeritus) to Bulgaria. One more thing, regardless of the statistics, in our country a large number of people live better than in other countries of the European Union. Paid annual leave 20 working days; paid maternity leave for 2 years; a huge part of Bulgarians own their own (paid for) homes; go on vacation abroad, etc. Without idealizing, Bulgaria has a huge problem - corruption. You may be surprised, but the main corrupt practices were imported by the businessmen from the USA and the EU.
Now Bulgaria "imports" the most Ukrainians to fill labor deficits. The war in Ukraine turned out to be a great boon for European business: on the one hand, GDP grew through arms exports; on the other hand, GDP grows because we exploit foreign (Ukrainian) resources.
An economy of chaos and uncertainty, unfortunately. And the golden words "demoocracy" and "market economy" turned out to be another fake.
Greetings!
bdurankev@unve.bg
bdurankev@vuzf.bg
One more effect you have not covered is complementarity. I.e. a Satya who remained in India would be less productive than Satya in the U.S. due to the presence of others with complementary skills here. This is a net add to the global GDP by improving productivity.
Oh definitely. I just assumed this in Model 3. The way this helps the sending country is the same, though -- linkages of trade, tech transfer, investment, and so on!
Complementarity ameliorates your small country exception - a "Satya" would not be the skilled Satya there, absent the learning effects due to his complementary colleagues. Hence the loss due to his emigration would be smaller.
Yes, its gains from trade, but they are much more powerful when complementarity of skills is involved (the factor behind agglomeration effects). Now, with remote work technology, this means that the emigrant can in effect extend complementarity to their home countries. I think this is why eg semiconductor design teams can be in India even sans actual production.
How would the Smallonia models change if a progressive tax policy is added? Intuitively at least in Model 1 the two poorer Dmallonians who are staying behind might struggle to keep their government services and infrastructure intact.
IMO, none of this matters though. Individuals matters, not countries. Maybe it's best for everyone to leave Smallonia and we can turn it into a wildlife refuge.
Your last sentence reminded me of when I suggested to someone that Nauru could be abandoned when the phosphates ran out (with its population resettled in Australia): he suggested the best use for it afterwards would be as a bombing range for the RAAF...
Damn you got this up fast. Human capital formation is important.
"Brain gain" is a new concept for me. Thanks for introducing that appropriate phrase into my brain today, Noah.
This is, of course, commonse & I've been trying, unsuccessfully, to explain this to Labour supporters etc when they close their ears to distinguishing between asylum seekers & economic migrants. They simply do not want to know that most of us are very open to employing talented immigrants while deploring our desire to block those that are here for the benefits or working illegally.
In the US we hear very little from anyone on the Right that supports a merit-based immigration system. On the Left we have the full range of views.
"If you think of Smallonia as just Mark and Sofia... their living standards are completely unchanged"
"If you think of Smallonia as Mia, Mark, and Sofia... their living standards are also unchanged"
If we think of Smallonia as a collective of "all citizens of Smallonia" (which is how most normal people think of their country), then the living standards of Mark and Sofia are seriously affected by the exit of their most productive (and likely consumptive) member. And for an economist, you're remarkably blasé about the 50% shrinkage in Smallonia's GDP. Also, skilled immigrants are rarely subsistence farmers.
"It’s very hard to know, on balance, which of these are happening, and how much."
That's why this is an issue that best decided by voters instead of economists.
I agree with you that America should import more skilled immigrants. And fewer unskilled ones. And especially fewer illegal ones. But it's because those are good policies for Americans. While I do care what happens to Smallonia in some abstract sense, I care what happens to America more.
Isn't the best way to reduce illegal immigration to put those who employ illegal immigrants in prison?
Yes. It is. Which is why we don't do it. One party sees illegals as new voters. The other sees them as cheap labor. Neither sees them as competition, since neither is particularly interested in non-college-educated voters right now. If the GOP is able to complete it's transition to a working-class party, that may change.
Illegal immigrants can't vote (pretty much by definition): don't you mean that the Republicans see illegal immigrants as cheap labor, while the Democrats (or at least a vocal minority of them) don't want to enforce immigration laws because they believe in open borders?
And isn't it more correct to say that the Democrats are only interested in college-educated voters while the Republicans are only interested in property-owning voters?
The fact that they can't vote today is irrelevant; the more that are here the greater will be the pressure to "normalize" them, which just means set them on a path to citizenship and (as the Dems see) future Democratic voting. I'm not sure they're actually right about this, but it is how they see the world. The Dems have convinced themselves that black and brown people can will never abandon the Party, so they now spend their time courting wealthy, highly educated whites, ignoring the fact that their interests are often diametrically opposed to those of working-class black and brown people.
I think you're right about the old GOP, and when Josh Hawley announced last year that "the GOP is a working class party now", he was somewhat premature. The GOP is struggling to realign itself in a working class direction. My view is it will either succeed or be replaced. A working class (70%+ of the population) without a political vehicle is a potential power center too lucrative to last long. The Left has abandoned them and is now sowing division by race and sex and other weird criteria essentially to keep them from developing class solidarity. This will not work. Eventually the races will realize that Anthony Oliver and black hip hop share a common, class-based, lament. Either the GOP will embrace them all, or someone new will. Personally, I hope the GOP does, since I fear that a "someone new" might well be a true demagogue (whether Left or Right variety.) For a preview of what that could look like, look at Latin America. If you thought Bernie and/or Trump were extreme, you ain't seen nothing yet. Pray that the GOP pulls its head out of it's butt and figures this out.
So what you’re saying is that people overseas trying to immigrate to the US are like American kids trying to get really good at basketball so they can become an NBA star. Statistically, basically no one is going to make it into the NBA, but a lot of people are going to get really good at basketball.
Sitting in India, having considered emigrating once myself, and now planning the same option for my kids with every discretionary cent I have, I cannot disagree with the overall premise and conclusions of your article. India has seen plenty of hard benefits (largest recipient of inward remittance, booming IT sector, etc) and softer pluses (more professional work culture, less dominance of the traditionally 'business' castes in every sector, etc). Far from trying to plug people emigrating, policy makers have long switched to woo their services and investments actively when the diaspora visit India during their December break.
Having said that, need to point out a few nuances - this notion of 'big' and 'small' countries is simplistic. While India has a youthful population and 1.4B people in all, there is a very small cream that has the educational skills, the risk-taking mindset, the ability to work with uncertain policy, the ability to attract talent and all the other skills required to drive entrepreneurship and boost Indian GDP if they sit here. When these guys emigrate (and they do, in large numbers), the country loses much more than just their tax revenue.
As others have pointed out, the possibility of 'lemons' being left behind in the country is increased. While there are a few who have stayed back in the country for patriotic reasons, most others from the top universities only stayed back because they could not get the best universities or jobs in the first world. So the 'cream' was / is being lost. Punjab state is a great example of this.
A third fallout I have seen is creation of asset bubbles by the diaspora, especially in real estate. Too many ghost houses and societies have flats owned by non-residents who never show up.
In sum, over a longer period, I think these negatives get mitigated and the positives outweigh them. Yet, it maybe useful to think of specific countermeasures to the above problems - for e.g. a structured programme to bring back diaspora who have spent 10-25 years in the first world, to come back and setup a business back here.
You ignore taxes. When the top earners leave those taxes also leave.
That does hurt "Smallonia".
If brain gain increases overall Smallonian human capital, then they can get more tax revenue!
I've always gotten the vibe that the "brain drain" argument in the US is mainly made by people who are opposed to immigration anyway (they do not agree with the gains from trade view) and are looking for a way to shame the pro-immigration folks. It reminds me of the NIMBYs who bemoan "gentrification" or climate deniers who lament the environmental impact of EV production.
BTW, there is another human capital argument that could be relevant. It might be that the poorer country has a comparative advantage in forming "early stage" human capital (say through high school/university which might mean a small loss to the source country, although this is hard to disentangle from the incentive effects of people in source countries "overinvesting" in education on the long shot of being able to emigrate which could be a benefit to the source country.
Trotsky whimsically predicted that America would be the location of a multiracial eugenics creating "a new breed of men – the first worthy of the name of Man". Though only after adopting communism:
https://www.marxists.org/archive/trotsky/1934/08/ame.htm
Let's make the toy example from before a little more realistic. As before, Mia, Mark and Sofia have the following incomes:
Mia: 100
Mark: 60
Sofia: 50
Let's further assume that Mia is a software engineer that could work anywhere in the world for a similar salary, Sofia is a local farmer, and Mark is retired and the income is a government provided pension. Mark's pension is financed by taxing Mia 50 and Sofia 10. What happens when Mia moves from Greece to Switzerland is left as an exercise to the reader. But it's not pretty.
Maybe Smallonia should not assume that Mia exists solely to be Mark's personal tax cattle? Perhaps they need to govern in a manner that recognizes Mia may get tired of being milked so much, and has left to graze the greener pastures of Switzerland. Or, they they can go full on communist East Germany and shoot Mia in the back of the head if she tries to leave so as to discourage other tax cattle from doing the same.
𝘔𝘢𝘳𝘬'𝘴 𝘱𝘦𝘯𝘴𝘪𝘰𝘯 𝘪𝘴 𝘧𝘪𝘯𝘢𝘯𝘤𝘦𝘥 𝘣𝘺 𝘵𝘢𝘹𝘪𝘯𝘨 𝘔𝘪𝘢 50 𝘢𝘯𝘥 𝘚𝘰𝘧𝘪𝘢 10.
Kind of works if you have a community and social cohesion where Mia gets a similar pension, supported by Milla, the next citizen delivered from the people lab. And Milla then is assured of a similar track.