Does the brain drain hurt?

Does the emigration of skilled workers hurt developing economies? This report says yes:

More than half of known graduates from some of the world's poorest nations are living abroad in a brain drain that threatens the countries' long-term development, the Organisation for Economic Co-operation and Development warned yesterday.

However, a debate at the Royal Economic Society's annual conference yesterday took a more optimistic view. Hillel Rapoport says a modest brain drain can actually benefit a developing country. There are three ways in which this is possible:
1. The prospect of getting a well-paid overseas job encourages young people to get an education. If some of these subsequently stay in the country - say because of limits on migration or because they just change their minds -  human capital will  improve. That's good for the economy.
2. Migrant workers send wages back home. That can help younger family members through school or relieve poverty in the extended family. (A few years ago, we'd have said that it relieved the balance of payments constraint.)
3. Skilled workers who work for private companies can encourage those companies to invest in their home country, by providing valuable local knowledge. Such inward investment can help growth.
The papers presented yesterday aren't webbed up yet, but earlier versions are here and here. And a more sceptical view is here.
This question surely deserves more attention than it's getting. Too much of the debate (I use the term loosely) about immigration focuses on its impact on the UK. But shouldn't we worry more about its impact on developing countries? And if this impact really is positive, isn't this a very powerful argument  for migration, even if  (which is a big if) it does hurt the UK?   

Comments

[AJE]

In my own research, I noticed that immigrants in the UK remittances sent from the UK through formal channels in 2001 was $73.2bn.
This exceeds the amount of foreign aid, and of course the amount sent through informal channels would be huge also.

Forget charity, the best thing we can do for developing countries is to open trade and borders.

[dearieme]

It may not only exceed the amount of foreign aid, it is surely going to be better spent?

[Andrew Milner]

I found this on the web and thought it deserved dissemination.
"The author Nevil Shute had a theory about the effect of prolonged emigration from the UK - he felt that it would accelerate the slide into socialism and federalism, since the people who left would tend to be risk-takers, conservative or liberal in their views, while those who stayed would be risk-averse and more inclined to look for a government to look after them. Maybe he was right."
Would help to explain the current state of terminal meltdown.