2012-2013 psu econ dept seminar · 2012-2013 psu econ dept seminar ... brain drain is considered in...

Ryu, Jangsoo (Prof., Pukyung Univ.)

Park, Sungik (Prof., Kyungsung Univ.)

Kim, Jonghan(Prof., Kyungsung Univ.)

Cho, Jangsik (Prof., Kyungsung Univ.)

Kwak, Sohui (Researcher, BHRDI)

2012-2013 PSU Econ Dept Seminar

http://www.brepf.org/main/main.php?PHPSESSID=e28b08964d5d0f9727447d09e78c85c4

Contents Introduction Ⅰ

Research Contents and Methods Ⅱ

Ⅲ

The 1st Stage of Brain Drain 4 Ⅳ

Graduate Characteristics

Ⅴ The 2nd Stage of Brain Drain

5 The Regression and Decision Tree Analysis Ⅵ

Summary Ⅶ

1. Definition and Implication of Brain Drain

ⅠIntroduction

Related Concepts : brain gain, brain waste, brain circulation,

reverse brain drain

Brain drain (= human capital flight) : the departure of educated or

professional people from one country to another, usually for better pay or

living conditions

Brain drain occurs

- when individuals who studied and completed their education abroad

do not return to their home country and,

- when individuals educated in their home country emigrate in search

of higher wages or better opportunities.

A brain drain is usually regarded as an economic cost, since emigrants

usually take with them the fraction of value of their training sponsored by

the government.

ⅠIntroduction 2. Scope of Brain Drain

⇒ Research purpose of our study is to :

- study the amount of brain drain

- figure out the characteristics of brain drain

- find policy to curb brain drain in Busan,

which is the second-largest city of Korea.

In general, brain drain is considered in terms of international scope.

- Major concern is brain drain of skilled and trained persons from

developing to developed countries

- It is an abnormal form of scientific exchange between countries,

characterized by a one-way flow in favor of the most highly developed

countries (1969 UNESCO report)

However, the concept of brain drain may be applied to a national scope.

- Rapid urbanization in developing countries is related to brain drain.

- However, relatively developed countries such as Korea are also

experiencing brain drain in provincial areas.

ⅠIntroduction

Brain drain by states

☞ The Case of Brain Drain in the US.

ⅠInroduction ☞ The Case of Brain Drain in the US.

ⅠIntroduction

A major finding is that young educated people tend to be moving to cities,

while young people without a college education tend to be moving to rural

areas.

☞ The Case of Brain Drain in the US.

Why did they go or stay? (from Maine’s College Graduates: Where They Go and Why?)

- Keeping young people in state for their college educations was important

in curbing brain drain.

- College reputation was the most important factor determining whether

Maine’s high school graduates attended college in Maine or out of state.

The next most important factors were affordability and financial assistance.

- Graduates who stayed in Maine rated social issues, such as family and

cultural ties, as the main reasons why they live in state, while graduates

living out of state rated career opportunities as the main reason why they

left the state.

☞ Map of Korea

ⅠIntroduction

SMA(Seoul Metropolitan Area)

includes Seoul, Incheon and

Gyeonggi

Busan, Ulsan and Gyeongnam

are neighbors and form close

ties with each other

ⅠIntroduction Concentration of population and economic power to SMA is so severe in

Korea.

Population share GRDP share

SMA Busan SMA Busan

1985 39.0% 8.7% 46.1% 7.1%

2000 46.3% 7.9% 47.7% 5.7%

2010 49.1% 7.0% 48.8% 5.0%

Need to figure out the current situation of brain drain in Busan

- Many high school graduates in Busan go to universities in other regions.

- Lots of college graduates in Busan also go to other regions to get better jobs

due to lack of decent jobs

Need to figure how many, where and why do they go

Ⅱ. Research Contents and Methods

Contents: the current situation of brain drain in Busan

In- and out-migration of high school graduates to universities in other regions

: 1st stage of brain drain

Determinants of out-migration utilizing regression and decision tree analysis

The comparision between who stays and who goes out

In- and out-migration of college graduates to other regions to get jobs

: 2nd stage of brain drain

Net balance of brain drain


Methods: Utilizing Graduate Occupational Mobility Survey(GOMS)

Population are graduates of colleges and universities. Sample size is about

18,000.

Questionnaire includes education history, job careers, current job information,

personal information and family background, etc…

GOMS has geographical information on high school, college or university and

workplace Limitation is that persons without college diploma are not covered in the

sample.

Our research is based on the cohort analysis of the young adults who

graduated on Aug. 2008 and Feb. 2009.


☞ Things to keep in mind to better understand our research

College is 2 or 3 years and university is 4 years. In general, university is

preferred to college.

Public university is preferred to private university. Tuition and fees are cheaper

in public than private university.

English ability is important to get admission from university and job offer from

company as well. Many university students take TOEIC(test of English for

international communication)

In general, big company in terms of the number of employees is better than small company.

Ⅲ. Graduate characteristics

<Table 1> Graduate characteristics (classified by college location)

Unit: %, persons

Busan Ulsan Kyungnam SMA Other sum

Regional sum 8.5 1.3 5 39.3 45.9 480,192

Sex

Male 46.6 48.6 47.2 47.3 50.6 245,973

Female 53.4 51.4 52.8 52.7 49.4 234,219

Education

level

College diploma 34.7 50.3 52.9 43.1 39.2 197,623

University diploma 65.3 49.7 47.1 56.9 60.8 282,571

Parents’

income

when they

enter

college

Less than U$900 6.8 6.9 10.6 13.1 13.3 59,723

U$900~2,700 38.3 42.2 40.8 33.7 46.6 194,314

U$2,700~4,500 47.3 45.5 43.9 37 32.7 174,535

More than U$4,500 7.6 5.4 4.6 16.3 7.4 51,620

Father’s

education

level

Less than high school 65.9 74.1 75.6 62.9 73.4 330,139

College 12 13.7 10.2 4.6 5.2 28,310

Higher than university 22.1 12.2 14.2 32.5 21.4 121,741

Ⅲ. Graduate characteristics <Table 2> Graduate characteristics (classified by college location) Unit: %, persons

Busan Ulsan Kyungnam SMA Other Sum

Regional sum 8.5 1.3 5.0 39.3 45.9 480,192

Birth place

SMA 2.9 3.1 2.5 71.3 18.8 176,844

Busan 69.9 18.9 21.2 3.9 3.3 49,255

Ulsan·

Kyungnam 19.7 67.7 70.5 3.2 5.4 46,969

Other 7.5 10.4 5.7 21.5 72.4 204,849

High school

location

SMA 1.4 3.8 1.6 79.5 17.8 188,936

Busan 75.9 13.6 16.9 2.6 2.0 45,235

Ulsan·

Kyungnam 18.3 78.3 78.2 2.4 5.0 46,402

Other 4.6 4.2 3.3 15.6 75.2 197,305

Job location

SMA 12.2 6.8 9.6 93.2 28.2 188,936

Busan 63 13.5 10.8 0.5 1.4 45,235

Ulsan·

Kyungnam 20.6 73.8 76.2 1.4 3.7 46,402

Other 4.3 5.9 3.5 5.0 66.6 197,305

Ⅳ. The 1st Stage of Brain Drain

1. In- and Out-Migration(high school⇒ college or university)

68.6% to Busan, 1.9% to Ulsan, 8.9% to Kyungnam, 10.7% to SMA

Ulsan 12.1%, Kyungnam 17.4% to Busan. SMA Only 0.3% to Busan

⇒ Out-migration to SMA from Busan is pronounced, while in-migration to

Busan from Ulsan and Kyungnam is notable.

<Table 3> In- and out-migration of 1st stage(college and university)

College or university location

Total Busan Ulsan Kyungnam SMA Other

High

school

location

Busan 68.6 1.9 8.9 10.7 9.9 45,235

Ulsan 12.1 37.4 5.7 9.7 35.1 11,453

Kyungnam 17.4 1.5 51.5 9.6 20.0 34,951

SMA 0.3 0.1 0.2 78.7 20.7 188,936

other 0.9 0.1 0.4 14.8 83.8 197,306

total 40,874 6,164 23,863 187,202 219,778 477,881

Unit: %, persons


For the case of university, 67.5% to Busan, 13.7%(>10.7%) to SMA.

⇒ Brain drain is more severe in university than college.

<Table 4> In- and out-migration of 1st stage(university) Unit: %, persons

University location

Total

Busan Ulsan Kyungnam SMA Other

High school

location

Busan 67.5 0.7 8.5 13.7 9.5 29,161

Ulsan 13 30.6 4.3 14.2 37.9 7,466

Kyungnam 21.5 1.2 40.9 13.2 23.2 18,990

SMA 0.4 0.1 0.1 73 26.3 106,447

Other 1.2 0.2 0.4 17.8 80.3 119,128

Total 26,670 3,066 11,249 106,473 133,734 281,192


Net balances of Busan show surplus to Ulsan(544 persons) and to

Kyungnam(2,052 persons). Hence, there is brain gain. However, net balance of

Busan show deficit to SMA(-4,306 persons) and other(-2,651 persons). Hence

there is brain drain

⇒ In total, net balance of Busan is –4,361 persons.

<Table 5> Net balance of 1st stage of brain drain

University location

total Busan Ulsan Kyungnam SMA other

High

school

location

Busan 544 2,052 -4,306 -2,651 -4,361

Ulsan -544 -110 -880 -3,755 -5,289

Kyungnam -2,052 110 -2,973 -6,173 -11,088

SMA 4,306 880 2,973 -9,893 -1,734

other 2,651 3,755 6,173 9,893 22,472

Unit : person


2. Comparision of characteristics

The shares of persons whose parents’ income is more than U$2,700 are 55.6%

in Busan and 65.9% in SMA

<Table 6> characteristics of high school graduates by university regions Unit: %, persons

Busan Ulsan·Kyungnam SMA other sum

Parents’

income

when they

enter

university

Less than U$900 7.1 8.3 11.6 14.6 3821

U$900~2,700 37.3 42.6 22.5 36.6 16398

U$2,700~4,500 47.2 45.5 42.4 34.8 20466

More than U$4,500 8.4 3.5 23.5 13.9 4550

Father’s

education

level

Less than high

school 65.6 78.6 51.7 61.9 29459

College 12.5 7.5 4.5 15.3 5155

Higher than

university 21.9 13.9 43.8 22.9 10623

The shares of persons whose parents’ education level is higher than university

are 21.9% in Busan and 43.8% in SMA


<Table 7> Employment performances by university regions

Busan Ulsan·Kyungnam SMA Other Sum

Employed 70.3 73.9 69.4 78 32,272

Number of

employees

less than 10 19.8 20 11.2 31.5 6,513

10~499 51.2 43.7 38.7 42.7 15,528

more than 500 29.0 36.3 50.2 25.9 10,230

Company

location

SMA 10.4 9.8 81.6 21 6,050

Busan 75.5 47.7 8.9 28.4 19,425

Ulsan·Kyungnam 11.8 35.7 3.0 11.1 4,329

other 2.3 6.9 6.5 39.5 2,335

Unit: %, persons

The shares of employed persons are about the same across regions.

The size of companies, in terms of the number of employees, is bigger in SMA

than Busan.

Once they leave Busan for SMA, they are not likely to come back for jobs.


<Table 8> Degree of satisfaction by university regions


Degree of

satisfaction

to company

Very unsatisfactory 0.3 1.0 0.0 0.0 91

Unsatisfactory 4.5 5.0 4.3 5.0 1,482

middle 42.5 30.5 33.3 38.7 12,852

Satisfactory 48.8 60.3 47.3 51.8 16,212

Very satisfactory 3.9 3.2 15.1 4.5 1,633

Degree of

satisfaction

to main

business


Unsatisfactory 3.5 3.3 4.1 1.8 1,088

middle 43.0 33.5 30.6 36.0 12,880

Satisfactory 49.3 57.4 52.3 57.5 16,588


(unit: %, persons)


The shares of persons whose salary is more than U$2,700 are 6.2% in Busan

and 18.0% in SMA

<Table 9> Salary by university regions


Sum 67.8 10.9 10.5 10.8 32,157

Salary

Less than U$900 34.1 30.7 33.8 27.7 14,944

U$900~U$2,700 59.7 63.1 48.2 65.1 26,847

More than U$2,700 6.2 6.3 18.0 7.3 3,444

(unit: %, persons)

Ⅴ. The 2nd Stage of Brain Drain

1. In- and Out-Migration(college or university⇒ labor market)

63.0% to Busan, 3.5% to Ulsan, 17.1% to Kyungnam, and 12.2% to SMA out of

college or university graduates in Busan region

Ulsan 13.5%, Kyungnam 10.8% to Busan. SMA Only 0.5% to Busan

<Table 10> In- and out-migration of 2nd stage

Job location

Total Busan Ulsan Kyungnam SMA other

College or

university

location

Busan 63.0 3.5 17.1 12.2 4.2 28,980

Ulsan 13.5 64.6 9.2 6.8 5.9 4,675

Kyungnam 10.8 2.3 73.9 9.6 3.5 17,523

SMA 0.5 0.4 1.0 93.2 5.0 139,056

other 1.4 1.7 2.0 28.2 66.7 165,416

total 6.7 2.2 6.5 51.1 33.5 355,650

Unit: %, persons

⇒ Out-migration to Kyungnam and SMA from Busan is notable, and in-

migration to Busan from SMA is negligible.


For the case of university, 57.8% to Busan, 16.0%(>12.2%) to SMA.

⇒ Brain drain is more severe in university than college.

<Table 11> In- and out-migration of 2nd stage(university) Unit: %, persons

Job location

total

Busan Ulsan Kyungnam SMA Other

university

location

Busan 57.8 4.0 16.7 16.0 5.5 18,935

Ulsan 4.5 63.6 9.6 13.3 9.1 2,060

Kyungnam 15.6 1.2 64.9 13.7 4.6 7,344

SMA 0.6 0.7 1.4 90.5 6.8 76,842

Other 1.3 1.9 2.0 34.4 60.4 98,069

total 6.8 2.2 5.5 53.0 32.5 203,250


Net balances of Busan show deficit to Ulsan(-381 persons) and to Kyungnam(-

3,069 persons). Hence, there is brain drain. In addition, net balance of Busan

show deficit to SMA(-2,890 persons). Hence there is brain drain.

⇒ In total, net balance of Busan is –5,302 persons.

<Table 12> Net balance of 2nd stage of brain drain

Job location


College or

university

location

Busan -381 -3,069 -2,890 1,038 -5,302

Ulsan 381 -29 275 2,573 3,200

Kyungnam 3,069 29 -347 2,699 5,450

SMA 2,890 -275 347 39,789 42,751

other -1,038 -2,573 -2,699 -39,789 -46,099

Unit : person


By adding up the 1st and 2nd net balances, we can calculate net balance from

high school graduation to employment.

<Table 13> aggregate balances from high school graduation to employment

Net balances of Busan show surplus only to Ulsan(163 persons) but deficit to

Kyungnam(-1,017), SMA(-7,196 persons). Hence there is brain drain. ⇒ In total, aggregate net balance of Busan is –9,663 persons.

Job location


High school

location

Busan 163 -1,017 -7,196 -1,613 -9,663

Ulsan -163 -139 -605 -1,182 -2,089

Kyungnam 1,017 139 -3,320 -3,474 -5,638

SMA 7,196 605 3,320 29,896 41,017

other 1,613 1,182 3,474 -29,896 -23,627

Unit : persons


High school university Job

Busan

Ulsan

Kyungnam

SMA

other

Busan

Ulsan

Kyungnam

SMA

other

Busan

Ulsan

Kyungnam

SMA

other

68.6

37.4

51.5

78.7

83.8

63.0

64.6

73.9

66.7

Unit : %


2. Comparision of characteristics

The shares of persons whose education level is university degree are 48.1% in

Busan and 85.8% in SMA.

The shares of persons whose income is more than U$2,700 are 6.5% in Busan

and 9.8% in SMA.

<Table 14> characteristics of graduates by job locations Unit: %, persons


Sex

Male 48.1 52.1 50.8 66.4 14,487

Female 51.9 47.9 49.2 33.6 14,493

Education level

College 40.1 34.3 14.2 14.2 10,044

University 59.9 65.7 85.8 85.8 18,936

Income

Less than U$900 6.3 6.1 5.1 2.1 1,725

U$900~2,700 87.3 80.2 85.1 74.2 24,632

More than U$2,700 6.5 13.6 9.8 23.6 2,623


The shares of TOEIC score more than 700 are 12.8% in Busan and 21.5% in

SMA.

The degrees of satisfaction toward Busan college or university are lower in graduates working in SMA than in Busan.

<Table 15> characteristics of graduates by job locations


TOEIC scores

More than 700 12.8 18.4 21.5 37.7 4,655

500~700 7.0 9.3 5.5 3.6 2,081

Less than 500 0.7 1.2 0.0 0.0 202

degree of

satisfaction to

college or

university

Faculty 3.33 3.39 3.32 3.33 3.34

Quality of class 3.33 3.45 3.22 3.46 3.35

Satisfaction to major 3.48 3.52 3.35 3.4 3.47

Satisfaction to school 3.42 3.47 3.18 3.52 3.41

Experience of foreign study 12.7 11.9 22.4 18.4 4,051

Unit: %, persons


The size of companies, in terms of the number of employees, is bigger in SMA

than Busan.



Number of

employees

1~4 11.6 7.0 5.8 12.9 2,895

5~9 10.6 9.3 7.1 3.7 2,788

10~99 37.1 33.7 35.0 28.9 10,379

100~499 15.7 19.9 17.4 9.9 4,792

500~999 4.5 4.9 5.5 9.2 1,428

More than 1,000 20.4 25.2 29.1 35.5 6,698

(Unit: %, persons)

Ⅴ. The 2nd Stage of Brain Drain The shares of ‘more than satisfactory to the company’ are 51.8% in Busan and

57.3%in SMA.



Degree of

satisfaction

to the

company


Unsatisfactory 5.3 2.4 3.0 3.4 1,256

middle 42.6 42.1 39.7 29.0 12,047

Satisfactory 48.4 51.2 45.2 59.0 14,219


Degree of

satisfaction

to main

business


Unsatisfactory 3.9 2.8 0.4 7.9 996

middle 44.2 43.5 36.6 21.3 12,219

Satisfactory 48.2 50.0 49.9 66.9 14,356


(Unit: %, persons)

The shares of ‘more than satisfactory to main business’ are 51.5% in Busan

and 61.0%in SMA.

Ⅵ. The Regression and Decision Tree Analysis

1. Determinants of 1st Stage of Brain Drain

(1) Out-migrant model (2) In-migrant model (3) Total model

Coeff. S.D Coeff. S.D Coeff. S.D

Male dummy .117*** .021 -.390*** .024 -.134*** .016

University dummy -.043* .026 .621*** .028 .270*** .019

Major groups Science & Technology -.011 .023 -.218*** .025 -.137*** .017

Arts .019 .033 .397*** .033 .202*** .024

Parents’ income when they

enter university

U$900~1,800 dummy .472*** .045 .522*** .052 .515*** .034

U$1,800~2,700 dummy .626*** .040 .435*** .047 .567*** .030

U$2,700~4,500 dummy .670*** .038 .481*** .047 .615*** .029

More than U$4,500 dummy .185*** .047 -.100 .067 .051 .039

Father’s education level

College dummy .428*** .036 .135*** .039 .278*** .025

University dummy -.053* .028 .138*** .030 .036* .021

Graduate school -.738*** .064 -.533*** .085 -.628*** .052

High school location

Ulsan dummy -2.80*** .031

Kyungnam dummy .403*** .033 -2.39*** .018

SMA dummy -3.74*** .052 -6.51*** .044

Other dummy -2.75*** .038 -5.53*** .026

High school groups

Foreign & science -.966*** .076 -.68*** .182 -1.01*** .071

Vocational .615*** .030 .341*** .035 .484*** .022

Other .444*** .060 -.477*** .094 .110*** .047

.058 .314 .633

Sample size 45,236 432,645 477,881

Ⅵ. Regression and Decision Tree Analysis


2. Determinants of 2nd Stage of Brain Drain

(1) Out-migrant model (2) In-migrant model (3) Total model

Coeff. S.D Coeff. S.D Coeff. S.D

Male dummy .035 .032 -.422*** .035 -.132*** .023

University dummy -.223*** .033 .410*** .091 .091*** .024

Ages 25~30 dummy -.106*** .036 .041 -.081 -.081*** .026

More than 30 dummy .376*** .056 .250*** .174 .174*** .034

Major groups Science & Technology -.384*** .029 .214*** .032 -.118*** .021

Arts -.411*** .041 .121** .048 -.129*** .031

university location

Ulsan dummy -2.727*** .046

Kyungnam dummy .072 .052 -2.802*** .029

SMA dummy -3.30*** .061 -6.122*** .043

Other dummy -2.05*** .051 -4.937*** .026


College dummy .486*** .044 1.07*** .041 .845*** .032

University dummy -.014 .035 -.034 .042 -.020 .027

Graduate school -.401*** .091 -16.54 337.2 -.807*** .076

Public university dummy -.803*** .033 -1.26*** .055 -.993*** .027

Toeic score

500~600 dummy -.138 .098 .372*** .091 .147** .072

600~700 dummy -.182*** .058 .462*** .067 .054 .048

700~850 dummy -.232*** .045 .272*** .052 .014 .036

More than 850 dummy -.292* .053 -.364*** .093 -.290*** .046

Experience of foreign study dummy -.113*** .039 .021 .047 -.025 .031

.105 .191 .586

Sample size 28,981 326,669 355,650


3. Determinants of Employment and Salary

(1) Employment (2) Salary

Coeff. S.D Coeff. S.D

Male dummy .234*** .008 38.326*** .363

University dummy -.192*** .009 19.560*** .381

Ages 25~30 dummy .121*** .009 11.737*** .421

More than 30 dummy .411*** .013 68.555*** .546

Major groups Science & Technology .086*** .008 13.217*** .342

Arts -.122*** .010 -16.694*** .493


College dummy .035** .015 .341 .659

University dummy -.086*** .009 10.235*** .407

Graduate school -.237*** .017 7.906*** .826

Public university dummy -.037*** .010 5.355*** .448

Double major dummy .087*** .011 1.871*** .504

Toeic score

500~600 dummy -.335*** .024 -16.222*** 1.191

600~700 dummy -.437*** .017 -12.002*** .872

700~850 dummy -.499*** .011 9.099*** .575

More than 850 dummy -.224*** .015 37.841*** .706

Degree of satisfaction to university .015** .006 5.121*** .260

Experience of foreign study dummy .249*** .011 9.467*** .474

.048 .174

Sample size 480,193 353,259

Ⅶ. Summary

Busan is experiencing brain drain.

- Many high school graduates out-migrate to SMA, while lots of high school

graduates in-migrate to Busan. Net balance exhibits deficit, which implies brain

drain in Busan.

- A lot of college and university graduates out-migrate to SMA and Kyungnam.

Net balance exhibits deficit, which implies brain drain in Busan.

- Adding up 1st and 2nd balances reveals deficit of –9,663 persons in Busan.

It is shown that out-migrants from Busan are in general better than people who

stay in Busan.

- High income and highly educated families are more likely to let their

sons/daughters enter universities in SMA.

- English ability and job market performance of the out-migrants to SMA is better

than people who stay in Busan.

Ⅶ. Summary

Only 8.9% of out-migrants to SMA universities get jobs in Busan, while 81.6%

get jobs in SMA.

- Once high school graduates leave Busan for SMA, they are not likely to come

back for jobs in Busan.

- Keeping young people in Busan for their college educations is important in

curbing brain drain.

Thank you for listening

2012-2013 psu econ dept seminar · 2012-2013 psu econ dept seminar ... brain drain is considered in...

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