The Impacts of Brain Drain on Production and Foreign Trade of Iran Using a General Equilibrium Model

Along with the tendency of countries to globalization, the competition arena changes from regional to the global level. In this process those countries are successful that have higher competition ability in international trade. One of the factors affecting the strength of competition in the field of international nations is human resources specialist. This is while during last decades, Iran has experienced high rates of immigration to developed countries. This study investigated the effects of brain drain (brain drain define as skilled labor migration) on Iran’s production and foreign trade for different economic sectors using general equilibrium model (GTAP). The results showed that brain drain would have negative effects on production and foreign trade of country. The brain drain phenomenon, with an exception of oil and gas sectors, has negatively influenced the rate of imports and exports and net trade balance in other economic sectors (agriculture, industry and services), the main reason of which is the determining role of specialized labor force in the quality of products and the degree of competitiveness. The reason that brain drain has no impact on oil and gas sectors, is because these sectors apply production inputs of other sectors (Being a leading oil and gas sector).