Does Finland suffer from brain drain?

This paper examines the trends in immigration to and emigration from Finland during the period 1987-2006. The focus is on the "human capital content" of the migration flows, the key question being: Is Finland losing out in the international competition for highly educated individuals? International comparisons presented by the OECD give the impression that Finland perform very weakly in the global competition for talent, as the share of highlyskilled immigrants is very low. However, these comparisons are distorted by the lack of information with regard to the level of education of immigrants into Finland. It would be desirable that the Central Statistical Office could provide better information on this issue. The results of this paper indicate that Finland's emigrants are indeed better educated than its immigrants, and that brain-drain exists to a certain degree. However, the magnitude of the brain-drain phenomenon is not very large, and there is no statistical evidence of the welleducated to emigrate would have increased over time. Although Finland's immigrants are more poorly educated than the Finnish population at large, they are apparently better educated than immigrants to, for instance, Sweden or Denmark, owing to the disproportionately large share of immigrants from Estonia and Russia to Finland. Nevertheless, the labour market performance of Finnish immigrants is as bad as for immigrants in most Western European countries, i.e. their unemployment rate is about twice as high as that of the native population. This amounts to a serious failure of assimilation policies.