The Effect of Economic Freedom on Brain Drain from G77 Selected Countries to U.S.A

Skilled and motivated manpower, is considered the most important factor of development, and advancement of countries depends on attracting, training, keeping and usage of human resources and educated elite. Although many factors affect the brain drain, but closed economy and lack of the economic freedom in developing countries have significant effect on brain drain. In fact the weak economic structure and closed space in the above countries are major factors on brain drain. So in this study we investigated the effect of economic freedom on brain drain by panel data approach from selected G77 developing countries to the United States during the period of 1997-2009. Econometric results of this study show that economic freedom has negative and significant effect on brain drain of the above countries to the United States. Each of the components of the index of economic freedom, have negative and significant effect on brain drain separately. Unemployment rate for graduates of universities and accumulation of brain drain positively and significantly affect on brain drain in the studied countries. Human development index also has negative and significant effect on brain drain.