Brain Drain: Definition, Causes, Effects, and Examples

Brain drain is a slang term that alludes to the loss of human capital from one area to another or from one industry to another. Brain drain usually happens when ... TableofContents Expand TableofContents WhatIsBrainDrain? UnderstandingBrainDrain Types Causes Effects ReducingBrainDrain Examples BrainDrainFAQs TheBottomLine Economy Economics WhatIsBrainDrain? Braindrainisaslangtermthatindicatesasubstantial emigration ormigrationofindividuals.Abraindraincanresultfromturmoilwithinanation,theexistenceoffavorable professionalopportunitiesinothercountries,oradesiretoseekahigher standard ofliving.Inadditiontooccurringgeographically,braindrainmayalsooccurattheorganizationalorindustriallevelswhenworkersperceivebetterpay,benefits,orupwardmobilitywithinanothercompanyorindustry. KeyTakeaways Braindrainisaslangtermindicatingsubstantial emigration ormigrationofindividuals.Braindraincanresultfrompoliticalturmoilortheexistenceofmorefavorable professionalopportunitieselsewhere.Itcausescountries,industries,andorganizationstoloseacoreportionofvaluableindividualsSomeoftheconsequencesofbraindrainincludethelossoftaxrevenue.Oneofthebestwaystoreducebraindrainistoboostgovernmentinvestmentinthelocaleconomy. UnderstandingBrainDrain Asnotedabove,braindrainisthemovementofpeoplefromoneareatoanother.Braindrainoftenoccursbetweencountriesandcitieswheretheycanfindbetteropportunities.Theymaymovetolookforworkorabetterstandardofliving.Braindraincanalsorefertothemovementofprofessionalsbetweencorporationsand/orindustriesforbetterpayoropportunities. Braindraincausescountries,industries,andorganizationstoloseacoreportionofvaluableindividuals.Thetermisoftenusedtodescribethedepartureofcertainprofessionals,includinggroupsofdoctors,healthcareworkers,scientists,engineers,orfinancialprofessionals.Whenthesepeopleleave,theplacestheyleaveareharmedintwomainways: Expertiseislostwitheachemigrant,diminishingthesupplyofthatprofession. The(country's)economyisharmedbecause eachprofessionalrepresentssurplusspendingunits. Professionalsoftenearnlargesalaries,sotheirdeparturereduces consumerspending inthat regionorthecountryoverall. Geographic,Organizational,andIndustrialBrainDrain Braindraincanoccuronseverallevels:geographic,organizational,andindustrialbraindrain. GeographicBrainDrain Geographicbraindrainhappenswhentalentedprofessionalsfleeonecountryorregionandendupmovingtoacountrythattheyfeelgivesthembetterandmoreopportunities. Severalcommoncausesprecipitatebraindrainonthegeographiclevelincludingpoliticalinstability,poorqualityoflife,limitedaccesstohealthcare,andashortageofeconomicopportunity.Thesefactorspromptskilledandtalentedworkerstoleavesourcecountriesforplacesthatofferbetteropportunities. OrganizationalandIndustrialBrainDrain Organizationalbraindraininvolvesthemassexodusoftalentedworkersfromacompany,oftenbecausetheysenseinstability,a lackofopportunitywithinthecompany,ortheymayfeelthattheycanrealizetheircareergoalsmoreeasilyatanothercompany.Industrialbraindrainhappenswhenskilledworkersexitnotonlyacompanybutanentireindustry. Thesetwoformsofbraindrainareusuallyabyproductofarapidlyevolvingeconomiclandscapeinwhichcompaniesandindustriesunabletokeepupwithtechnologicalandsocietalchangeslosetheirbestworkerstothosethatcan. CausesofBrainDrain Sowhatcausesbraindrain?Asnotedabove,thereareseveralunderlyingfactorsthatleadtothisphenomenon.Theycanvary,though,basedonthetypeofbraindrain. Someofthemainreasonswhypeoplechoosetoleavetheirhomecountries/regionsinclude: Economicopportunities,includingnewandbetterjobs,higherstandardsofliving,accesstohousingandhealthcarePoliticalstrifeandinstabilityPersecutionbasedonreligion,gender,orsexuality Whilemostbraindrainisgeographic,thereissomebraindrainthatoccursasaresultofsituationalfactors.Forinstance,skilledworkersmayleavecompaniesandindustrieswhenmachinesandtechnologyreplacehumanlabor. Braindrainisalsoknownasahumancapitalflight, EffectsofBrainDrain Braindraincanhavemajorconsequences.Theeffectsarefeltnotonlyintheareawherethebraindrainoccursbutalsowherethebraingain(whereindividualsmoveto)takesplace.Anditcanoftenhaveachainreaction. Areasaffectedbybraindrainendupwithadearthofhumancapital.Professionalswhogoelsewhereendupleavingalargeholetofill—onethatisn'talwayseasytofill.Considermedicalprofessionalsindevelopingnationswhomovetopartsofthedevelopedworldforbetteropportunities.Theremaynotbeenough(qualified)peopletoreplacethemwhentheyleave,whichaffectsthequalityofhealthcareforthoseleftbehind. Anothereffectonareasthatexperiencebraindrainisthelossofrevenue.Governmentsrelyonincometaxestofundtheirsocialprogramsandinfrastructureprojects.Amassexodusleadstoadropintaxreceiptswhichcanstunteconomicgrowthanddevelopment. Areasthatseebraingainarealsoimpacted.Someofthesefactorsincludeovercrowding(especiallyinmajormetropolitanareaswheremoreopportunitiesareavailable).Morepeopleinoneareaputsastrainonresources,whichcanleadtohigherpricesandtaxes. MeasurestoReduceBrainDrain Whilethereisn'taneasyfixforbraindrain,therearesomethingsthatbusinessandgovernmentleaderscandotoreduceorminimizeit.Theseinclude: Increasinginvestmentsintocertainareasoftheeconomy Offeringcompetitivewages Pavingthewayforlegalandsocialreform Improvingthequalityofresources,suchashousingandhealthcare Providingaffordablehousingsolutions ExamplesofBrainDrain UkraineBrainDrain Warandconflictarebigcatalystsforbraindrain.ThiswasevidentfollowingRussia'sinvasionofUkraine.StudiesconductedbytheEuropeanParliamentindicateamassivedisplacementofthecountry'spopulationacrosstheEuropeanUnion(EU).Oneofthemainareasthestudyexaminedwasthemovementofstudents.ThenumberofstudentsleavingUkrainedoubledfrom25,000to50,000between2007and2014.Thatnumberjumpedtoabout78,000by2019.Themajorityofthesestudentswereenrolledinpost-secondaryinstitutionsinPoland. SomeprofessionalsleavingUkrainearehavingatoughtimefindingworkintheirfieldsinothercountriesbecauseofalackofavailableworkortransferrableskills.Assuch,somearechoosingtotakeonlower-payingjobstofindasenseofsecurityandsafety. Butitisn'tjustUkrainethat'sexperiencingabraindrain.Infact,Russiaisexperiencingaflightofhumancapital,too.EconomicsanctionsplacedonthecountrybytheU.S.,theUnitedKingdom,andCanada,arehavingaprofoundimpactonRussiancitizens.ThefederalgovernmentalsohaslawsinplacepunishingcitizenswhosupportUkraine.It'sestimatedthatasmanyas200,000Russiansleftthecountry. PuertoRicoBrainDrain BraindrainwasasignificantconsequenceoftheongoingPuertoRicandebtcrisisasof2019.Thiswasparticularlyevidentintheexodusofskilledmedicalprofessionals,whichhittheislandhard.WhilealmosthalfofPuertoRico'sresidentsreceiveMedicareorMedicaid,theislandreceivessignificantlyfewerfederalfundstopayfortheseprogramsthansimilarlysizedstatesonthemainland,suchasMississippi. Thislackoffundingcombinedwiththeisland'sdirefinancialsituationprecludesitsabilitytooffercompetitivecompensationtodoctors,nurses,andothermedicalstaff.Asaresult,such professionalswerereportedtobeleavingtheislandenmasse formorelucrativeopportunitiesonthemainland. ThisformofbraindrainwasalsoexacerbatedbyHurricaneMaria,whichhittheislandinSeptember2017,creatingevenmoreincentivesforemigration. WhatDoesBrainDrainMean? Braindrainisaslangtermthatalludestothelossofhumancapitalfromoneareatoanotherorfromoneindustrytoanother.Braindrainusuallyhappenswhenskilledindividualsandprofessionalsleavethehomecountries(inmostcases,developingnations)andgoelsewheretotakeadvantageofbetteropportunities.Italsooccurswhenindividualsleaveoneareaoftheworkforceandgotoanotherforsomeofthesamereasons. HowDoesEconomicGrowthHelpFightBrainDrain? Braindrainoccurswhenthereisalackofopportunityinacertainarea.Forinstance,professionalslivinginadevelopingnationmayleaveinsearchofbetteropportunitiesinpartsofthedevelopedworld.Makingeconomicinvestmentstoboostgrowthoftenprovidesincentivesforpeopletostay,asitmeansaccesstobetter(andmore)resources,personaleconomicprosperity,andthepotentialforahigherstandardofliving. WhatImpactDoesBrainDrainHaveonDevelopingNations? Braindrainortheexodusofhumancapitaloftenhasabigimpactondevelopingnations.Itoftenleavesaholethatishardtofillsincetheremaynotbeasmanypeoplewithsimilarskillstofillthatvoid.Italsoleadstoalossintaxrevenue,whichcanleadtohighertaxationtomakeupfortheshortfall.Citizensmaynotbeabletoaccessqualityresources,suchaseducationandhealthcare,whichalsoaffectstheirqualityoflife. TheBottomLine Humancapitalisavitalpartoftheeconomy.Butwhenconditionsgettough,theseindividualsmaylookelsewhereforbetterjobs,higherpay,andanimprovedstandardofliving.Amassexodusofpeoplecanleadtowhat'scalledbraindrain.Whenhumancapitalisdepletedfromacertainarea,itcanhavelastingeffectsonthelocaleconomy. ArticleSources Investopediarequireswriterstouseprimarysourcestosupporttheirwork.Theseincludewhitepapers,governmentdata,originalreporting,andinterviewswithindustryexperts.Wealsoreferenceoriginalresearchfromotherreputablepublisherswhereappropriate.Youcanlearnmoreaboutthestandardswefollowinproducingaccurate,unbiasedcontentinour editorialpolicy. EuropeanParliament."RUSSIA'SWARONUKRAINE:UKRAINIANSTUDENTSINTHEEU." NBCNews."AbraindrainisdevastatingUkraine." BBCNews."Russiafacesbraindrainasthousandsfleeabroad." CenteronBudgetandPolicyProcedures."PuertoRico'sMedicaidProgramNeedsanOngoingCommitmentofFederalFunds." NationalProviderIdentifier(NPI)Dashboard."2020Update--AftermathofHurricaneMariaandtheEmigrationofHealthCareProfessionalstoMainlandUS." NationalOceanicandAtmosphericAdministration."NationalHurricaneCenter,TropicalCycloneReport:HurricaneMaria,"Page2. CompareAccounts AdvertiserDisclosure × TheoffersthatappearinthistablearefrompartnershipsfromwhichInvestopediareceivescompensation.Thiscompensationmayimpacthowandwherelistingsappear.Investopediadoesnotincludealloffersavailableinthemarketplace. Provider Name Description RelatedTerms GeographicalLaborMobilityDefinition Geographicallabormobilityreferstoworkers'abilitytorelocateinordertofindemploymentintheirfieldofwork. more HumanCapitalDefinition:Types,Examples,andRelationshiptotheEconomy Humancapitalisanintangibleassetorqualitynotlistedonacompany'sbalancesheet.Itcanbeclassifiedastheeconomicvalueofaworker'sexperienceandskills. more WhatIsIndustrialization? 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