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Trade, Aid, Remittances and Migration

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Author Info
Sule Akkoyunlu () (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
Abstract

I investigated whether migration is interrelated with trade, aid and remittances so that any policies that consider trade, aid and remittances also affect the decision to migrate. We developed and estimated an empirical model of Turkish migration to Germany and tested the model for the 1969-2004, using the cointegration technique. A single cointegrating vector is found among the gross migration inflows and the following explanatory variables: the relative income ratio between Germany and Turkey, the unemployment rates in Germany and Turkey, aid, the trade intensity variable and the ratio of manufacturing exports with Germany to total exports with Germany and remittances as a ratio of Turkish GDP. The results of this study show that migration, trade, aid and remittances are interrelated, however, migration will be better managed when the dynamic gains from trade and aid are considered. Hence, the broad-based and rapid economic development with increase in income is the only effective means of reducing migration pressures in a labour-surplus country. This is mainly because the income differential is the most significant factor in determining migration flows.

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Publisher Info
Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 09-229.

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Length: 29 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:kof:wpskof:09-229

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Related research
Keywords: Trade; Aid; Remittances; Migration; Cointegration;

Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
F24 - International Economics - - International Factor Movements and International Business - - - Remittances
F35 - International Economics - - International Finance - - - Foreign Aid

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  1. Kevin D. Hoover & Stephen J. Perez, 1999. "Data mining reconsidered: encompassing and the general-to-specific approach to specification search," Econometrics Journal, Royal Economic Society, vol. 2(2), pages 167-191.
    Other versions:
  2. Anna Maria Mayda, 2007. "International migration: A panel data analysis of the determinants of bilateral flows," CReAM Discussion Paper Series 0707, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
    Other versions:
  3. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier. [Downloadable!] (restricted)
  4. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  5. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July. [Downloadable!] (restricted)
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