Brain Drain Problem
Definition of Brain Drain. The brain drain problem refers to the situation where a country loses its best workers. For example, skilled workers in developing countries such as India or Pakistan may be attracted by better rates of pay and working conditions in developed countries.
The brain drain means that developing countries struggle to develop because the best educated skilled labour leaves the economy. Thus it becomes hard to break the cycle of losing the best workers. The developing countries lose out in several ways:
- Lower tax revenue for government.
- Loses potential entrepreneurs.
- Shortage of key workers
Brain Drain in Eastern Europe
After many eastern European economies such as Poland, the Czech Republic and Romania joined the European Union, workers were tempted to leave the East and move to countries like the UK where jobs are better paid. Membership of the EU involves freedom of movement and labour. Therefore, workers will be attracted to the best paid areas.
Are there any benefits of the Brain drain?
Although developing countries may lose their best workers, it is possible that they will gain from revenue sent back. This is known as remittances - and is quite a significant contribution to inflows of capitalAlso workers may gain more experience and knowledge from working in other countries. This knowledge can then be used when they return.
Related Essays and Revision Notes
Economics Revision Guides
 |
 |
Economics Dictionary
- Economics Dictionary at Amazon UK
- Economics Dictionary at Amazon.com