Human Capital and the Brain Drain Phenomenon: A Study of the Immigration and Emigration of Canada's Knowledge Workers

This research discusses the relationship between the migration of skilled professional and managerial workers from Canada to the United States, the so called "brain drain," and seeks to determine if and how the Canada-U.S. Free Trade Agreement (F.T.A.) and the North American Free Trade Agreement (NAFTA) may have affected bilateral flows of permanent and non-permanent immigrants between the two countries. Classical economic theory suggests that trade and factor movements are substitutes, so that freer trade between Canada and the United States could be expected to reduce incentives for bilateral migration. On the other hand, the labor demands of multinational corporations in the emerging global marketplace require a greater degree of worker mobility than has heretofore existed. The research reviews available historic and longitudinal evidence related to political, social and economic effects of the F. T.A. and the NAFTA. The conclusion is that both agreements contain certain factors which may actually ease the passage of workers from one country to the other, but that the primary reason for movement south by Canada's knowledge workers is probably more closely connected to internal economic conditions within Canada than to external ones. The following are appended: (1) Graph 1: Annualized Permanent Immigration to and Emigration from Canada as a Percentage of the Population, 1851-1998; (2) Graph 2: The Magnitude of Emigration to All Destinations--Tax Filers Who Ceased to Reside in Canada; (3) Push Factors of Brain Drain; and (4) Work-Related Factors that Attract Postsecondary Graduates to the US.