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Encyclopedia > Human capital flight

A brain drain or human capital flight is an emigration of trained and talented individuals for other nations or jurisdictions, due to conflict or lack of opportunity or health hazards where they are living. It parallels the term "capital flight" which refers to financial capital which is no longer invested in the country where its owner lives and earned it. Investment in higher education is lost when the trained individual leaves, usually not to return. Also whatever social capital the individual has been a part of is reduced by their departure. Spokesmen for the Royal Society first coined the expression “brain drain” to describe the outflow of scientists and technologists to the United States and Canada in the early 1950s.

"Brain drain" is a perception that is hard to measure. In 2000, the US Congress announced it was raising the annual cap on the number of temporary work visas granted to highly skilled professionals under its H1B visa program, from 115,000 to 195,000 per year, effective until 2003. That suggests a ballpark figure for the influx of talent into the United States at that time. In the same year the British government cooperating with the Wolfson Foundation, a research charity, launched a 20 million, five-year research award scheme that aimed at drawing the return of the UK’s leading expatriate scientists and sparking the migration of top young researchers to the United Kingdom.

Historically, the greatest brain drains have been from rural to urban areas. In the 19th century and 20th century there were great migrations to North America from Europe, and in modern times, from developing nations to developed nations. Sometimes such drains occur between developed nations, e.g. from Canada to the United States especially in the finance, software, aerospace, healthcare and entertainment industries due to higher wages and lower taxes.

Iraq is said to be undergoing a "brain drain."

An opposite situation, in which many trained and talented individuals seek entrance into a country, can be called a brain gain; this may create a brain drain in the nations that the individuals are leaving. A Canadian symposium in 2000 gave circulation to the new term, at a moment when many highly-skilled Canadians were moving to the United States but at the same time many qualified immigrants were coming to Canada. This is sometimes referred to as a 'brain exchange'.

See also

External links

  • Mario Cervantes and Dominique Guellec, "The brain drain: Old myths, new realities" (http://www.oecdobserver.org/news/fullstory.php/aid/673/The_brain_drain:_Old_myths,_new_realities.html)
  • "Brain Drain: Brain Gain (http://www.maytree.com/HTMLFiles/brain_drain.htm)

  Results from FactBites:
Human capital - Wikipedia, the free encyclopedia (1061 words)
Human capital is a way of defining and categorizing peoples' skills and abilities as used in employment and otherwise contribute to the economy.
In this view, human capital is similar to "physical means of production", e.g., factories and machines: one can invest in human capital (via education, training, medical treatment) and one's income depends partly on the rate of return on the human capital one owns.
Human capital is substitutable: it will not replace land, labor, or capital totally, but it can be substituted for them to various degrees and be included as a separate variable in a production function.
Capital flight - Wikipedia, the free encyclopedia (281 words)
Capital flight, in economics, occurs when assets and/or money rapidly flow out of a country, due to an economic event that disturbs investors and causes them to lower their valuation of the assets in that country, or otherwise to lose confidence in its economic strength.
This fall is particularly damaging when the capital belongs to the people of the affected country, because not only are the citizens now burdened by the loss of faith in the economy and devaluation of their currency, but probably also their assets have lost much of their nominal value.
The Argentine economic crisis of 2001 was in part the result of massive capital flight, induced by fears that Argentina would default on its external debt (the situation was made worse by the fact that Argentina has an artificially low fixed exchange rate and was dependent on large levels of reserve currency).
  More results at FactBites »



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