Brain drain is a slang term indicating substantial emigration or migration of individuals. Brain drain can result from several factors including political turmoil or the existence of more favorable professional opportunities elsewhere. Brain drain causes countries, industries, and organizations to lose a core portion of valuable individuals. Understanding Brain Drain Brain drain causes countries, industries, and organizations to lose a core portion of valuable individuals. The term often describes the departure of groups of doctors, healthcare professionals, scientists, engineers, or financial professionals. When these people leave, their places of origin are harmed in two main ways. First, expertise is lost with each emigrant, diminishing the supply of that profession. Secondly, the country's economy is harmed because each professional represents surplus spending units. Professionals often earn large salaries, so their departure reduces consumer spending in that region or the country overall. Geographic, Organizational, and Industrial Brain Drain Brain drain, also known as a human capital flight, can occur on several levels. Geographic brain drain happens when talented professionals flee one country or region within a country in favor of another. Organizational brain drain involves the mass exodus of talented workers from a company, often because they sense instability, a lack of opportunity within the company, or they may feel that they can realize their career goals more easily at another company. Industrial brain drain happens when skilled workers exit not only a company but an entire industry. Several common causes precipitate brain drain on the geographic level including political instability, poor quality of life, limited access to health care, and a shortage of economic opportunity. These factors prompt skilled and talented workers to leave source countries for places that offer better opportunities. Organizational and industrial brain drain is usually a byproduct of a rapidly evolving economic landscape in which companies and industries unable to keep up with technological and societal changes lose their best workers to those that can. Real World Example of Brain Drain As of 2019, brain drain has been a significant consequence of the ongoing Puerto Rican debt crisis. In particular, the exodus of skilled medical professionals has hit the island hard. While more almost half of Puerto Rico's residents receive Medicare or Medicaid, the island receives significantly fewer federal funds to pay for these programs than similarly sized states on the mainland, such as Mississippi.1 2 This lack of funding combined with the island's dire financial situation precludes its ability to offer competitive compensation to doctors, nurses, and other medical staff. As a result, such professionals are leaving the island en masse for more lucrative opportunities on the mainland. In a report from CBS, the news outlet discusses some personal cases including the story of Damarys Perales who worked as an accountant in Puerto Rico's health department.3 Moreover, the country’s brain drain was also exacerbated by Hurricane Maria, which made landfall in Puerto Rico on Sept. 20, 2017, creating even more incentive for emigration.4 Compete Risk Free with $100,000 in Virtual Cash Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you're ready to enter the real market, you've had the practice you need. Try our Stock Simulator today >> ARTICLE SOURCES Related Terms Geographical Labor Mobility Geographical labor mobility refers to workers' ability to relocate in order to find employment in their field of work. more What Is a Maximum Wage? A maximum wage is a price ceiling on compensation paid to employees. more Brexodus Brexodus refer
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