Expats costing NZ $14k each

Photo / Dean Purcell

New Zealand's best and brightest expatriates are costing the country $14,000 apiece through foregone tax and costs of government services such as education, according to World Bank research.

As the OECD leader in so-called 'brain drain', where highly-skilled people emigrate, New Zealand was included in a World Bank policy group's investigation into tertiary-educated migrants from small nations.

Though expats put a strain on their home nation by leaving, the incentives for them to do so are great, with highly-skilled kiwi migrants earning an average US$116,000, compared to US$65,600 if they stayed.

Returning expats can also look to a brighter future, with a mean salary of $75,100, while they bring back an average US$53,700 in savings with them.

Even accounting for higher costs of living abroad, New Zealanders were better off by US$21,000 overseas than they were at home, the study found.

"The largest benefits are to the migrants themselves, who benefit through massive gains in income and through greater human capital,"
said report authors John Gibson and David McKenzie.

"The main cost we measure is the fiscal cost of emigration."

The National Party successfully campaigned on halting the brain drain in 2008, and were able to reap the rewards from returning expatriates last year as the worldwide recession forced migrants to return home in the face of rising unemployment.

In May, Prime Minister John Key said this year's personal tax cuts were essential to attracting New Zealand-born skilled professionals.

The study surveyed 271 New Zealanders who excelled academically between 1976 and 2004, and the average sample member was in the top 7 per cent of New Zealand earners.

Other nations included in the study were Ghana, Micronesia, Papua New Guinea, and Tonga.