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What is Brain Drain in Economics? - Definition, Causes, Effects & Examples

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  • 0:00 Definition Of Brain Drain
  • 0:45 Causes Of Brain Drain
  • 2:00 Effects Of Brain Drain…
  • 3:00 Possible Actions To…
  • 3:35 Examples Of Brain Drain
  • 4:40 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Francis

Jennifer has a Masters Degree in Business Administration and pursuing a Doctoral degree. She has 14 years of experience as a classroom teacher, and several years in both retail and manufacturing.

This lesson will discuss an economic slang term, brain drain. It will give a definition and explanation of the term, possible causes, and effects. To clarify, a few examples will also be included.

Definition of Brain Drain

Brain drain can be described as the process in which a country loses its most educated and talented workers to other countries through migration. This trend is considered a problem, because the most highly skilled and competent individuals leave the country, and contribute their expertise to the economy of other countries. The country they leave can suffer economic hardships because those who remain don't have the 'know-how' to make a difference.

Brain drain can also be defined as the loss of the academic and technological labor force through the moving of human capital to more favorable geographic, economic, or professional environments. More often than not, the movement occurs from developing countries to developed countries or areas.

Causes of Brain Drain

There are various causes of brain drain, but they differ depending on the country that's experiencing it. The main causes include seeking employment or higher paying jobs, political instability, and to seek a better quality of life. Causes of brain drain can be categorized into push factors and pull factors.

The push factors are negative characteristics of the home country that form the impetus for intelligent people migrating from Lesser Developed Countries (LDC). In addition to unemployment and political instability, some other push factors are the absence of research facilities, employment discrimination, economic underdevelopment, lack of freedom, and poor working conditions.

Pull factors are the positive characteristics of the developed country from which the migrant would like to benefit. Higher paying jobs and a better quality of life are examples of pull factors. Other pull factors include superior economic outlook, the prestige of foreign training, relatively stable political environment, a modernized educational system to allow for superior training, intellectual freedom, and rich cultures. These lists are not complete; there may be other factors, some of which can be specific to countries or even to individuals.

Effects of Brain Drain on the Home Country

When brain drain is prevalent in a developing country, there may be some negative repercussions that can affect the economy. These effects include but are not limited to:

  • Loss of tax revenue
  • Loss of potential future entrepreneurs
  • A shortage of important, skilled workers
  • The exodus may lead to loss of confidence in the economy, which will cause persons to desire to leave rather than stay
  • Loss of innovative ideas
  • Loss of the country's investment in education
  • The loss of critical health and education services

Brain drain is usually described as a problem that needs to be solved. However, there are benefits that can be derived from the phenomena. When people move from LDC countries to developed countries, they learn new skills and expertise, which they can utilize to the advantage of the home economy once they return. Another benefit is remittances; the migrants send the money they earn back to the home country, which can help to stimulate the home country's economy.

Possible Actions to Curb Brain Drain

The drawbacks of brain drain outweigh the benefits, so there are some moves that governments can make to reduce the number of highly educated and skilled workers that relocate to other countries. One way that governments can keep its skilled workers is to ensure that citizens feel safe and to take steps to stimulate economic activity.

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