The Science and Technology Committee, chaired by MK Zebulon Orlev, recently discussed the painful issue of brain drain ● The discussion was based on the findings of a study that will be presented by Omer Moab from the Shalem Center, which was done together with Eric Gold, his colleague from the Department of Economics at the Hebrew University of Jerusalem
Yehuda Comforts, people and computers
● Among the findings: the emigrants include among them the best minds with higher education who easily find an economic alternative overseas ● Also: pay attention to the talented newcomers who return to Israel
One of the biggest nightmares of high-tech industry leaders and heads of state interested in its technological future is the issue of brain drain - a "beautiful name" by which people are referred to who, in a personal decision of a moment, decided to tie their future in countries overseas. Beyond the labeling and classification of these people under a "beautiful name", their growing number creates a problem, which is perhaps the most serious, that the State of Israel will face in the coming years: brain drain
The Science and Technology Committee of the Knesset, chaired by MK Zebulon Orlev, held a special discussion last week (Wednesday) on the subject of the brain drain from Israel. The discussion was based on research work done by Eric Gold, a senior lecturer in the Department of Economics at the University of Jerusalem, and Dr. Omar Moab, also from the Department of Economics, and a senior fellow at the Economic-Social Institute at the Shalem Center in Jerusalem. Dr. Moab presented to the committee the main points of the study that surveyed the phenomenon of decline between the years 1995 and 2002, according to criteria of education, employment, income, marital status, seniority in Israel, and more. Below are key points from the comprehensive and deep research the two did:
According to the data, the tendency to leave the country among the educated population - those with a graduate degree or higher - is higher than that found among those with low education. In 1995, more than 2.6% of all married, educated Jews in the 25 to 40 age group were defined by the Central Bureau of Statistics as "Yordim", compared to only 1.1% of all those with a low education, defined in 2002. The phenomenon is particularly noticeable among the new immigrants - in the same period, about 4.65% of the married, educated, aged 25 to 40 and close to 2% of those with low education left the country. The findings of the article are consistent with the claim that the heavy price of the economic/social policy in Israel is the loss of its best sons and daughters.
The study is based on the census conducted in 1995 along with an indication of the status of decline in 2002. According to the data, the tendency to leave the country is significantly higher among the educated population - those with a graduate degree or higher - than among those with low education.
In November 2003, the Ministry of Absorption published an estimate according to which approximately 750 Israelis - 12.5% of the total Jewish population in Israel - live abroad, especially in the USA and Canada. In the opinion of the authors of the study, the problem of the drop from the country is much more serious than it appears from the data published so far, which focused on the extent of the drop, the goals of the drop, and the reasons for it.
The findings presented in the study, as will be presented to the members of the Science Committee, show that those who descend are not a representative cross-section of the population. This is a unique group in which the relative weight of educated young people is significantly higher than their relative share in the general population.
Furthermore, according to the publication of the Central Bureau of Statistics from September 2005, there was a significant increase in the number of people leaving compared to the previous 3 years. According to recent estimates, the number of people leaving the country in 2005 reached more than 25,000. For the sake of comparison, during the three years between 2004-2002, approximately 19,000 Israelis left the country each year.
The situation among the Commonwealth of Nations
According to Moab and Gold, the findings from this study are particularly serious among immigrants from the Commonwealth of Nations. Many of the educated young people from this group immigrated from Israel to Western countries, and surprisingly, there is currently a fairly widespread phenomenon of emigration back to Russia. The same Russia, which is a very poor country compared to Israel, allows educated citizens or those with initiative, and who are willing to work hard, to enjoy a higher standard of living than that made possible by the State of Israel. The labor market in Russia is more flexible, the public sector is small, and the market economy enables the competition of educated and talented young people, who are rewarded with high wages, and pay income tax at a very low rate of their income - only about 13%!
Of course, brain drain is not only an Israeli problem. The authors of the study note that "the international migration of educated workers - the 'brain drain' - has aroused great interest in recent years in the economic-professional literature and the popular press. The intensifying demand for skilled workers has resulted in quite a lot of openness in the immigration policies of many of the developed countries, when it comes to "needed workers", mainly educated ones. Many studies do find a significant increase in the scope of immigration of educated people during the 90s. The developments in the technology industries, aside from a decrease in the birth rate, caused concern in countries such as Canada, Great Britain and Germany, which adjusted their immigration policies in order to encourage the absorption of educated workers."
The academy is on the run
In another part of the study, the authors of the article say that the universities in Israel provide an instructive example of how the high taxation, the rigidity of the labor market and the socialist approach that gives excessive power to the workers' committees and does not allow payment of wages according to achievements, alongside the alternatives in the global labor market, encourage the decline of the best minds from the country. Talented young people who go to Europe and the USA for doctoral studies at the best universities, often give up job offers at universities in Israel upon graduation, despite their desire to live in Israel, due to high salary disparities. In the US, market forces and the existing competition for excellent lecturers/researchers dictate the salary. Salaries in universities are based on individual contracts and the salary gaps between the successful researchers and their mediocre colleagues, or between researchers in sought-after fields, for example economics, business administration, law and medicine, and less sought-after fields, such as literature or sociology, can be very high. A 'star' in the economics department can get paid four or five times more than a mediocre researcher in English literature.
Many arguments can be made against the American system and in favor of the Israeli system according to which the salary is equal for all lecturers (of the same rank) regardless of field or excellence, whether at a university or a public college. But the claims, obviously, will not make the Americans adopt the socialist model, which almost completely disconnects the connection between achievements and wages, and leaves Israel out of competition in certain fields.
Thus, for example, the combination of a uniform and low salary (compared to the American alternative) and high taxation, leaves a starting lecturer at a university in Israel with a net salary of less than 2,000 dollars a month. The same young lecturer can choose the American market and win a salary exceeding $5,000 net, if he is an economist, or a salary exceeding $8,000 net, if he is a researcher in the field of finance at a business school. Such large disparities make it difficult for those who prefer to live in Israel to give up a job in the US. And this is in view of the unfortunate fact, which in large part stems from competitive salaries, that the first-rate American universities far surpass the universities in Israel in their achievements.
Even in the competitive market of the private sector, where wages are determined according to the laws of supply and demand, the high taxation compared to the US - the main immigration destination of Israelis - pushes the educated and talented Israeli to decline. The hi-tech worker who was paid twenty thousand shekels a month, feels that he is having a hard time supporting his family. Half of his income and about two-thirds of every addition to his income go to the various tax authorities: income tax, social security, health tax, VAT and more.
The rich are oppressed
And if we return to Israel, according to Moab, if we ignore the lower decile, a positive correlation is obtained between income and the tendency to leave the country. This means, the effect of suppressing the talented by the state outweighs the effect of the "perception of the job". The first effect is dominant in the lower part of the income distribution: second to seventh decile. Those who did not "get a job", but have ability, diligence or education, (which are reflected in the level of income), will show a higher tendency to decrease. On the other hand, among the immigrants who managed to get into the top three deciles of income, the dominant effect is the "taking the job" effect. The higher the income, the smaller the tendency to give up the job in Israel and move down. Unlike the data among the natives of the country, no distinct route is revealed within the upper or lower decile.
One of the tables appearing in the study examines the relevance of various factors to the decision to leave Israel. The main conclusion that emerges from the data in the table is that the issue of employment was very relevant in the process of making the immigration decision. The vast majority of the respondents - 71% - mentioned their spouse's work and 81% mentioned unemployment as very relevant factors for the immigration decision. Regarding income and standard of living, it is interesting that only 43% mentioned the income from work as a factor of great relevance to the immigration decision. Purchasing power, as reflected in the high relevance of taxation and the cost of living (66% and 75% respectively), is a more important factor in the decision to downsize, as reflected in the respondents' answers. Another interesting fact to note is the quality of the schools which was cited as a very relevant factor by 75% of the respondents - more than the security and political situation (65%).
Conclusions
In the "Conclusions" chapter, Gold and Moab write: In September 2005, with the publication of the CBS data regarding the extent of the decline from the country, many members of the public spoke about the seriousness of the data and the need for immediate treatment of the phenomenon, and even mentioned the need for mental health. The rising tide and falling tide, it is argued by many, are of great concern. Indeed, the immigration of the best sons and daughters and the decline in the scope of the aliya, is not only a problem in itself, but a symptom of a more serious problem - the failure of the State of Israel to create a society that allows welfare and quality of life, one that will attract the best of the Jewish people to immigrate, and not push the citizens of the state to seek their destiny outside its borders. The strength of this study, which characterizes the group of immigrants as highly educated, is to assist the Israeli government in designing a more concrete plan of action than the declaration of the need for mental calculation and urgent treatment of the problem.
Later, the researchers delve deeper and deal with the painful problems of gaps between the population, government policy, the debate that exists on the issue of poverty eradication and the "correct" distribution of resources, and more. But among the conclusions, the two do not forget to emphasize the following key sentence:
Without the qualitative and economic advantage, Israel will not be able to retain its productive citizens for a long time - those who have the choice to immigrate. It will not be attractive to educated new immigrants and it will not be able to maintain its military advantage against its enemies - an advantage that stems from human quality that enables technological and economic progress.
As mentioned, the research itself is extremely comprehensive and included tables, answers to various surveys conducted among immigrants from abroad, and scientific and practical analyzes of the roots of the phenomenon. The bottom line has already been discussed and stated many times; It was best defined - half jokingly and half painfully - by Philip Liebman from Gartner, the MAZT, who spoke about the future of the information systems industry at the Turkey conference: "If we don't know how to protect the human resource, in 10 years we will be back picking oranges."
