Success of Diaspora – Does it imply a success of home country?
There’s a lot of discussion around success of Indian diaspora outside of India. Previously, there were a few examples used to demonstrate that but with the arrival of more clear and concise statistics it’s obvious that Indians abroad are winning. They are ahead in education as well as in average income in the developed countries - wherever they migrated.
However the reason of this success was less discussed and so is its’ implication in India itself. I see Indians outperform immigrants from Bangladesh and Pakistan by a large margin. However when we consider the education index – I see all these countries are quite close, so is their HDI as per UN report. So, what’s going on?
First, let’s see the differences. There are a couple of things in place here. There is a gap between the performance of the country and the performance of diaspora. The gap can be explained by the channels used for immigration. Let me explain with an example. Let’s assume a class has a couple of sections. Let’s say there’s a Math competition between the two. Now representatives of section A is chosen by an exam conducted by the class teacher. The representatives of the section B were picked up randomly. Now, even if the sections show equivalent results in Annual Math exams, in the said Math competition section A will have an advantage. This is because they are using meritocratic channels to choose their representatives, rather than from a random sampling.
There are a couple of major channels used in immigration – the first one is via education and jobs, the second one is via family reunion and marriage. The former one is much more meritocratic channels than the latter. On the other hand, the latter is more “random” than the former. There’s a third non-meritocratic channel in case of USA (Diversity Visa) and that is purely random channel.
My first hypothesis is, the more meritocratic channels are used in a country-to-country migration, more the difference between home country and the diaspora. The theory is simple – people coming in to the foreign land with a work-visa will tend to earn more and will do better in education than one coming through family ties and marriage. Let me call this hypothesis selection bias.
The second hypothesis is more proportion of people comes in as immigrants – the more random the channels become. The simple example of section A and B can be used to explain this one. The section A has 20 students and section B has 100 students. If we choose top 10 from section A and top 10 from section B, we are providing a proportion bias to section B. If the student performance is distributed by a Gaussian curve (assuming meritocracy inside each section) then section B students will have an advantage if we look at their average scores – even if the average of whole class might be the same. Let me call this one proportion bias.
Let’s look at a couple of pictures.
Now the USA residency distribution.
So, a couple of observation -
1) Indians get a selection bias advantage in both in USA and UK. In UK, both Pakistan and Bangladesh have almost same selection bias. In USA, Pakistan has a better selection bias than Bangladesh.
2) Indians enjoy a vast proportion bias. India, Pakistan and Bangladesh population are in proportion of 8:1:1 but the number of immigrants in UK is close to 10:8:3. In USA the proportion is a bit better – 11:3:2.5.
Now coming back to the topic, Indians abroad do well because they use meritocratic channels and get a proportion bias. The use of meritocratic channels is prevalent among Indians because of the large presence of MNCs in India. Microsoft in UK or USA will be more comfortable to hire another employee working for the same company in India. However, the similar opportunity is non-existent in either of Pakistan or Bangladesh. So, the success of immigrants has almost nothing to do with the average performance of the home country (though India produces more % tertiary educated people than either of Pakistan or Bangladesh), but with the channels used in immigration.
The funny thing is, the perception of home country abroad is largely based on its diaspora and that creates a positive feedback loop. More Indians doing good abroad will imply more MNCs will hire from India and the loop will continue until the average is hit (which will take time given the population). So, at least for the time being, Indians will enjoy reputation abroad of being high-paid and educated class.