In the last 20 years, US territories have faced a serious problem: the loss of population. For instance, from 2004 to 2018, Puerto Rico lost 632,000 people, reaching its lowest population since 1979 at 3.2 million. This “brain drain” crisis is hurting tax revenues, disrupting local job markets, and threatening long-term growth.
Puerto Rico: A case study in economic exodus
From 2006 to 2017, Puerto Rico lost nearly ten percent of its population. This decline is mainly because of a severe economic recession made worse by hurricanes, poor government management, and budget cuts. One of the biggest concerns is who is leaving: young professionals, college grads, and skilled workers.
The New York Federal Reserve published research on this topic in the report “Causes and Consequences of Puerto Rico’s Declining Population.” The report described, “high school graduates have made up a greater percentage of the out-migrant pool than of the [general] population as a whole since the mid-2000s, when Puerto Rico’s population started to decline.”
High school and college graduates are key to economic growth. They pay taxes, create jobs, and support important services such as education and healthcare.
The Washington Post states that the exodus is partially due to natural disasters, such as Hurricane Maria in 2017. The hurricane destroyed infrastructure and exposed weaknesses in public systems. Additionally, climate change likely means that similar disasters are on the horizon, causing residents to question whether rebuilding is worth it. Finances and economy are also major factors, and Puerto Rico’s economy has long been struggling. Even after recovering in 2021, its GDP fell by two and a half percent in 2022. Fewer manufacturing jobs, rising debt, and little federal support are key issues. In fiscal year 2024, Puerto Rico’s labor force participation rate of 43.9% was low compared to the mainland’s rate of 62.6% As a result, many families are moving to the mainland US for better opportunities.
This demographic shift has significant effects. As more working-age adults depart, the island faces an aging population. This group needs more services, especially healthcare. This imbalance strains public resources and increases reliance on federal aid. Moreover, Schools and universities see fewer students, businesses have trouble finding workers, and entrepreneurial activities are slowing down.
The Northern Mariana Islands: Shrinking under the radar
The Northern Mariana Islands (NMI) are also experiencing a similar, if not worse, situation. Its population has also dropped steadily. This is mostly due to fewer foreign labor permits, weak healthcare, and limited education options. According to the US Census Bureau, the NMI’s population fell by over 12% from 2010 to 2020. Housing in NMI also dropped by more than 12% from 2010 to 2020 (a decline of 2,560 units), mostly in the Saipan municipality.
With the primary reason for migration being the pursuit of education, a substantial number are high school graduates. Many with Bachelor of Arts/Bachelor of Science (BA/BS) degrees also migrated. For example, among BA/BS degree holders, 3,293 migrated for employment and 313 migrated as professional degree holders, according to the NMI Department of Commerce.
Economic implications
The economic impacts of brain drain in these territories are complex. An older, smaller population means less productivity and consumer spending, slowing down economic growth. In response, local governments must either raise taxes or cut services. However, either of these options makes it more challenging to keep residents and attract investment. It is a vicious cycle.
Losing educated citizens limits the government’s ability to implement reforms and attract foreign investment. Investors are unlikely to invest in areas with an aging workforce and less consumer demand.
Healthcare systems suffer too. “In 2018, two‑thirds of primary care physicians in Puerto Rico were older than 55 years, compared with 43% nationwide,” the Rober Graham Center said. “Meanwhile, only four out of every 10 graduates of family medicine residencies from 2011 to 2017 remained on the island in 2018.” With fewer doctors and more elderly patients, service quality declines.
Addressing the crisis
Reversing brain drain is difficult but possible. Economic revitalization should make it easier for residents to stay or return. This involves investing in job creation in high-skill sectors like technology, healthcare, and renewable energy while strengthening higher education through scholarships, vocational training, and local job placements. Additionally, modernizing infrastructure to improve the quality of life and providing fair federal support for healthcare, education, and disaster relief are necessary. It is crucial to treat territorial residents the same as those in mainland states in order to maintain a stable economy on the islands.
Population loss and brain drain are not just demographic problems. They are economic warnings that need urgent attention. In places like Puerto Rico and the NMI, losing educated residents means a drop in future potential. Policymakers at both the territorial and federal levels must address this issue because, without action, these islands risk becoming unsustainable economies. Targeted investments can reverse this trend and lead to a stronger future.
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