When less wealthy countries send workers to work in advanced countries, do they suffer or gain in the long run? There is no definitive answer to this question that could be generally applied.

Among the sources of internationally migrant workers have made a point of supporting their citizens working abroad are Kerala State in India, and Philippines.

On the plus side, remittances sent by its migrant workers can make up a significant share of the source country’s economy. These remittances can stabilize foreign exchange. Some returning migrants bring back skills and capital, which can be invested in local businesses and industries. This can lead to economic diversification and development in the region.

On the negative side, emigrating workers may be relatively valuable workers (across the range of formal skills) due to having superior personal work attributes. Thus the source country may lose a disproportionate share of its better workers.  A recent research paper (here) points in this direction.  Also on the negative side, the source country’s political and economic policy may settle into to a chronic state of low expectations for domestic growth, knowing that so much for their country’s economic well-being is dependent on other, much larger, economy.

I have never seen study of the circular flow when skilled workers move to advanced countries and later on invest their added skills and capital back in their country of origin.

And, we need some one to write a book on how the politics of less developed countires are impacted by their diaspora.

The lack of a consensus about how to study the issue of net gain or loss to the sourcing country has becomes more and more painful as the relative size of the international migrant workforce (now over 8% of all workers in the world) and the dependence of emerging economy countries on remittances has grown. Global remittances were $100B in 2000; they are now approaching $700B.