Research Article


DOI :10.26650/ekoist.2021.35.1014765   IUP :10.26650/ekoist.2021.35.1014765    Full Text (PDF)

The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis

İsmail Hakkı İşcanTuğba Demirel

Economic and security concerns are among the leading factorsthat causemigration. According to theUnitedNations(UN), more than 280 million people engaged in international migration in 2020. UN data indicate that more than half (52%) of those who migrated in 2020 targeted developed countries. This circumstance highlights the urgency of considering the economic consequences of migration in these countries. Accordingly, the aim of this study is to analyze the effects of migration on economic growth (measured by means of gross domestic product or GDP) and unemployment in OECD countriesforthe period 2000–2019. Panel Autoregressive Distributed Lag (ARDL) and Panel Vector Error Correction Model (VECM) causality analyses are applied to determine relationships and their directions. The resultsreveal a longterm and statistically significant relationship between migration and economic growth, wherein 1% increase in migration level is associated with a 0.43% increase in GDP. A long-term and statistically significant relationship between migration and unemployment is also established wherein 1% increase in migration level appears to decrease unemployment by 0.53%. Panel VECM causality analyses confirm one-way relationships from migration to GDP and from migration to unemployment. These results demonstrate that migration in OECD countries in the period 2000–2019 contributed to economic growth due to migrants’ investments in target countries and reducing unemployment by establishing employment opportunities. Accordingly, considering that migration provides economic growth and reduces unemployment, it is essential for future studies to examine the nature of the individuals migrating at an empirical level to determine appropriate policies.

DOI :10.26650/ekoist.2021.35.1014765   IUP :10.26650/ekoist.2021.35.1014765    Full Text (PDF)

Göçün Gelişmiş Ülkelerde Büyüme ve İstihdam Piyasası Üzerine Etkileri: Bir Panel ARDL Analizi

İsmail Hakkı İşcanTuğba Demirel

Göçe neden olan faktörler arasında ekonomik ve güvenlik başta gelen unsurlardır. Birleşmiş Milletler (BM) verilerine göre 2020 yılında uluslararası göçe konu olan kişi sayısı 280 milyondan fazladır. Bu veriler bize aynı zamanda, 2020 yılında göç edenlerin yarısından fazlasının (%52) hedef coğrafyasının gelişmiş ülkeler olduğunu bildirmektedir. Bu durum bu ülkelerde göçün ne gibi ekonomik sonuçlar meydana getirdiğini önemli kılmaktadır. Buna göre bu çalışmanın amacıOECD ülkelerinde 2000-2019 dönemi için göçün ekonomik büyüme ve işsizlik üzerine etkilerini ampirik olarak analiz etmektir. Bu amaçla Panel ARDL analizine başvurulmuştur. Ayrıca tespit edilen ilişkilerin yönünü belirlemek için Panel VECM Nedensellik analizi gerçekleştirilmiştir. Çalışmada elde edilen sonuçlara göre göç ile ekonomik büyüme arasında uzun dönemli ve istatistiki açıdan anlamlı bir ilişki söz konusudur. Buna göre göç düzeyinde gerçekleşen %1’lik bir artış, GSYİH’da %0.43 oranında artış sağlamaktadır. Ayrıca göç ile işsizlik arasında uzun dönemli ve istatistiki açıdan anlamlı bir ilişkinin varlığı da yine bu çalışmada elde edilen sonuçlar arasındadır. Buna göre göç düzeyinde gerçekleşen %1’lik bir artış işsizliği %0.53 oranında azaltmaktadır. Panel VECM nedensellik analizi sonucuna göre ise göçten GSYİH’ya ve göçten işsizliğe doğru tek yönlü ilişkiler tespit edilmiştir. Bu sonuçlar OECD ülkelerinde 2000-2019 dönemindeki göçü oluşturan bireylerin nitelikli insan gücü olması ve ayrıca hedef ülkelere yatırımların gerçekleştirilmesi nedeniyle ekonomik büyümeye katkı sağladığı ve böylelikle istihdam olanakları yaratarak işsizliği azalttığı şeklinde yorumlanabilir.


EXTENDED ABSTRACT


Economic and security concerns are among the leading factors that cause migration. According to the United Nations (UN), more than 280 million people engaged in international migration in 2020. UN data indicate that more than half (52%) of those who migrated in 2020 targeted developed countries. This circumstance highlights the urgency of considering the economic consequences of migration in these countries. Accordingly, the aim of this study is to analyze the effects of migration on economic growth and unemployment in OECD countries for the period 2000–2019.

Two models are constructed for the analyses in this study. In the first model, Gross Domestic Product (GDP) represents economic growth, whereas the unemployment rate is the dependent variable in the second model. The level of migration is the independent variable in both models. A capital variable is also included in the models for better demonstration.

Before performing the analyses, multiple linear correlation tests are performed to investigate correlations between independent variables. Accordingly, Spearman Correlation Analysis and Variance Inflation Factor Analysis (VIF) were applied, revealing no correlation. Cross-section dependence was subsequently investigated on a panel and variable basis, confirming the presence of cross-section dependence, which suggests that second generation unit root tests are preferred. The tests revealed that the variables in question stagnate at different levels. These results indicate that panel ARDL analysis is appropriate for analyzing the relationship between migration, economic growth, and unemployment.

An ARDL analysis estimator is determined based on the Hausman test, with both models using these test results in a pooled in-group estimator. Analysis results for the first model reveal a long-term and statistically significant relationship between migration and economic growth, wherein 1% increase in migration level is associated with a 0.43% increase in GDP. The second model indicates a long-term and statistically significant relationship between migration and unemployment, i.e., 1% increase in migration level appears to decrease unemployment by 0.53%. Panel VECM causality analyses confirm one-way relationships from migration to GDP and from migration to unemployment. These results indicate that migration has an impact on both economic growth and unemployment.

Notably, Boubtane et al. (2013) (22 OECD countries) and Damette and Fromentin’s (2013) (14 OECD countries) conducted investigations regarding migration in OECD countries; such investigation is within the scope of this study and draw similar conclusions to the current research. This study is also compatible with the results of Friedburg and Hunt (1995), Islam (2007), Bashier and Siam (2014), Škuflić and Vučković (2018), and Esposito (2020). In this context, the results of this study are generally compatible with the literature.

Based on this study and previous research findings, it can be asserted that migration in OECD countries in the period 2000–2019 contributed to economic growth due to the addition of qualified manpower and investments in target countries, reducing unemployment by establishing employment opportunities. Accordingly, considering that migration provides economic growth and reduces unemployment, it is essential for future studies to examine the nature of the individuals migrating at an empirical level to determine appropriate policies. 


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APA

İşcan, İ.H., & Demirel, T. (2021). The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis. Ekoist: Journal of Econometrics and Statistics, 0(35), 181-203. https://doi.org/10.26650/ekoist.2021.35.1014765


AMA

İşcan İ H, Demirel T. The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis. Ekoist: Journal of Econometrics and Statistics. 2021;0(35):181-203. https://doi.org/10.26650/ekoist.2021.35.1014765


ABNT

İşcan, İ.H.; Demirel, T. The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis. Ekoist: Journal of Econometrics and Statistics, [Publisher Location], v. 0, n. 35, p. 181-203, 2021.


Chicago: Author-Date Style

İşcan, İsmail Hakkı, and Tuğba Demirel. 2021. “The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis.” Ekoist: Journal of Econometrics and Statistics 0, no. 35: 181-203. https://doi.org/10.26650/ekoist.2021.35.1014765


Chicago: Humanities Style

İşcan, İsmail Hakkı, and Tuğba Demirel. The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis.” Ekoist: Journal of Econometrics and Statistics 0, no. 35 (Jul. 2022): 181-203. https://doi.org/10.26650/ekoist.2021.35.1014765


Harvard: Australian Style

İşcan, İH & Demirel, T 2021, 'The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis', Ekoist: Journal of Econometrics and Statistics, vol. 0, no. 35, pp. 181-203, viewed 4 Jul. 2022, https://doi.org/10.26650/ekoist.2021.35.1014765


Harvard: Author-Date Style

İşcan, İ.H. and Demirel, T. (2021) ‘The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis’, Ekoist: Journal of Econometrics and Statistics, 0(35), pp. 181-203. https://doi.org/10.26650/ekoist.2021.35.1014765 (4 Jul. 2022).


MLA

İşcan, İsmail Hakkı, and Tuğba Demirel. The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis.” Ekoist: Journal of Econometrics and Statistics, vol. 0, no. 35, 2021, pp. 181-203. [Database Container], https://doi.org/10.26650/ekoist.2021.35.1014765


Vancouver

İşcan İH, Demirel T. The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis. Ekoist: Journal of Econometrics and Statistics [Internet]. 4 Jul. 2022 [cited 4 Jul. 2022];0(35):181-203. Available from: https://doi.org/10.26650/ekoist.2021.35.1014765 doi: 10.26650/ekoist.2021.35.1014765


ISNAD

İşcan, İsmailHakkı - Demirel, Tuğba. The Effects of Migration on Growth and Unemployment in Developed Countries: A Panel Autoregressive Distributed Lag Analysis”. Ekoist: Journal of Econometrics and Statistics 0/35 (Jul. 2022): 181-203. https://doi.org/10.26650/ekoist.2021.35.1014765



TIMELINE


Submitted25.10.2021
Accepted16.12.2021
Published Online31.12.2021

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