Decomposing migration drivers: Push-pull effects of political, financial, and socioeconomic institutions versus network effects in OECD migration

This paper explores the relative importance of key migration drivers and examines how institutional quality influences migration rates using a classical migration model and data from OECD countries over the period 1985–2015. Within a fixed-effects framework, we develop a novel analytical framework using comprehensive institutional quality indices constructed from the International Country Risk Guide (ICRG) to capture both pushing and pulling effects. Our variance decomposition analysis reveals that network effects account for 43.73% of the total explained variance in general migration inflows, but only 11.29% for inflow workers and 2.35% for foreign students changing status. Pushing and pulling effects contribute 23.02% and 16.49%, respectively, to general migration inflows, while for inflow workers, pushing effects dominate, explaining 34.96% compared to 18.78% for pulling effects. Among foreign students changing status, these effects are more balanced, contributing 30.52% and 30.05%, respectively. A deeper analysis of institutional qualities shows that political quality dominates both pushing and pulling effects across most specifications, except for foreign students changing status, where 46.67% of the pulling-effects variance is explained by socioeconomic factors, compared to 40.68% for political factors. Additionally, geographical distance is the most significant factor in bilateral migration costs, contributing over 75% across all specifications. These findings help policymakers better understand the complex roles of networks, institutional qualities, migration costs, etc. in shaping migration patterns.