IDEAS home Printed from https://ideas.repec.org/a/spr/jopoec/v29y2016i1d10.1007_s00148-015-0563-y.html
   My bibliography  Save this article

Does corruption promote emigration? An empirical examination

Author

Listed:
  • Arusha Cooray

    () (Nottingham University Business School)

  • Friedrich Schneider

    () (Johannes Kepler University of Linz)

Abstract

Abstract This paper investigates the effects of corruption on the emigration rate of low-, medium- and high-skilled individuals at the country level. Fixed-effects, system generalized method of moments (GMM) and instrumental variable estimations are used to establish a causal relationship between emigration and corruption. The empirical results indicate that as corruption increases, the emigration rate of high-skilled migrants also increases. The emigration rate of individuals with low and medium levels of educational attainment, however, increases at low levels of corruption and then decreases beyond a threshold of 3.4–4.0, where corruption is measured on a scale of 0 (not corrupt) to 10 (totally corrupt). Splitting the sample by income inequality suggests that increased inequality reduces the ability for medium- and low-skilled migrants to emigrate. Therefore, government action should focus on controlling corruption in order to prevent a brain drain.

Suggested Citation

  • Arusha Cooray & Friedrich Schneider, 2016. "Does corruption promote emigration? An empirical examination," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(1), pages 293-310, January.
  • Handle: RePEc:spr:jopoec:v:29:y:2016:i:1:d:10.1007_s00148-015-0563-y
    DOI: 10.1007/s00148-015-0563-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00148-015-0563-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Artjoms Ivlevs, 2014. "Happiness and the emigration decision," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-96, October.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Oguzhan C. Dincer & Burak Gunalp, 2012. "Corruption And Income Inequality In The United States," Contemporary Economic Policy, Western Economic Association International, vol. 30(2), pages 283-292, April.
    4. Dustmann, Christian & Okatenko, Anna, 2014. "Out-migration, wealth constraints, and the quality of local amenities," Journal of Development Economics, Elsevier, vol. 110(C), pages 52-63.
    5. Andrea ARIU & Pasquamaria SQUICCIARINI, 2013. "The Balance of Brains: Corruption and High Skilled Migration," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    6. Michel Beine & Khalid Sekkat, 2013. "Skilled migration and the transfer of institutional norms," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-19, December.
    7. Daniel Lederman & Norman V. Loayza & Rodrigo R. Soares, 2005. "Accountability And Corruption: Political Institutions Matter," Economics and Politics, Wiley Blackwell, vol. 17, pages 1-35, March.
    8. repec:pdn:wpaper:67 is not listed on IDEAS
    9. Ahlin, Christian & Pang, Jiaren, 2008. "Are financial development and corruption control substitutes in promoting growth?," Journal of Development Economics, Elsevier, vol. 86(2), pages 414-433, June.
    10. Méon, Pierre-Guillaume & Weill, Laurent, 2010. "Is Corruption an Efficient Grease?," World Development, Elsevier, vol. 38(3), pages 244-259, March.
    11. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    12. Timothy J. Hatton & Jeffrey G. Williamson, 2003. "Demographic and Economic Pressure on Emigration out of Africa," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 465-486, September.
    13. Ariu, Andrea & Docquier, Frédéric & Squicciarini, Mara P., 2016. "Governance quality and net migration flows," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 238-248.
    14. Nikolova, Milena & Graham, Carol, 2015. "In transit: The well-being of migrants from transition and post-transition countries," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 164-186.
    15. Clara Delavallade, 2006. "Corruption and distribution of public spending in developing countries," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 30(2), pages 222-239, June.
    16. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    17. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
    18. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    19. Mariani, Fabio, 2007. "Migration as an antidote to rent-seeking?," Journal of Development Economics, Elsevier, vol. 84(2), pages 609-630, November.
    20. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-553, September.
    21. Ralph Rotte & Michael Vogler, 2000. "The effects of development on migration: Theoretical issues and new empirical evidence," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(3), pages 485-508.
    22. Mendez, Fabio & Sepulveda, Facundo, 2006. "Corruption, growth and political regimes: Cross country evidence," European Journal of Political Economy, Elsevier, vol. 22(1), pages 82-98, March.
    23. Anna Mayda, 2010. "International migration: a panel data analysis of the determinants of bilateral flows," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1249-1274, September.
    24. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    25. Arusha Cooray, 2014. "Who Remits? An Examination of Emigration by Education Level and Gender," The World Economy, Wiley Blackwell, vol. 37(10), pages 1441-1453, October.
    26. Frederic DOCQUIER & Elisabetta LODIGIANI & Hillel RAPOPORT & Maurice SCHIFF, 2010. "Emigration and the quality of home country institutions," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2010035, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    27. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    28. Rosenzweig, Mark R, 1988. "Risk, Implicit Contracts and the Family in Rural Areas of Low-income Countries," Economic Journal, Royal Economic Society, vol. 98(393), pages 1148-1170, December.
    29. Lant Pritchett & Lawrence H. Summers, 1996. "Wealthier is Healthier," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 841-868.
    30. Banerjee, Biswajit, 1984. "The probability, size and uses of remittances from urban to rural areas in India," Journal of Development Economics, Elsevier, vol. 16(3), pages 293-311, December.
    31. Stark, Oded & Levhari, David, 1982. "On Migration and Risk in LDCs," Economic Development and Cultural Change, University of Chicago Press, vol. 31(1), pages 191-196, October.
    32. Dreher, Axel & Krieger, Tim & Meierrieks, Daniel, 2011. "Hit and (they will) run: The impact of terrorism on migration," Economics Letters, Elsevier, vol. 113(1), pages 42-46, October.
    33. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages 632-652, November.
    34. Bertoli, Simone & Brücker, Herbert, 2011. "Selective immigration policies, migrants' education and welfare at origin," Economics Letters, Elsevier, vol. 113(1), pages 19-22, October.
    35. Denise Hare, 1999. "'Push' versus 'pull' factors in migration outflows and returns: Determinants of migration status and spell duration among China's rural population," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 45-72.
    36. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, March.
    37. Eugen Dimant & Tim Krieger & Daniel Meierrieks, 2013. "The effect of corruption on migration,1985--2000," Applied Economics Letters, Taylor & Francis Journals, vol. 20(13), pages 1270-1274, September.
    38. Hoddinott, John, 1994. "A Model of Migration and Remittances Applied to Western Kenya," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 459-476, July.
    39. Stark, Oded & Micevska, Maja & Mycielski, Jerzy, 2009. "Relative poverty as a determinant of migration: Evidence from Poland," Economics Letters, Elsevier, vol. 103(3), pages 119-122, June.
    40. Richard B. Freeman & Remco Oostendorp, 2000. "Wages Around the World: Pay Across Occupations and Countries," NBER Working Papers 8058, National Bureau of Economic Research, Inc.
    41. Eugen Dimant & Tim Krieger & Margarete Redlin, 2015. "A Crook is a Crook … But is He Still a Crook Abroad? On the Effect of Immigration on Destination-Country Corruption," German Economic Review, Verein für Socialpolitik, vol. 16(4), pages 464-489, November.
    42. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    43. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June.
    44. repec:iza:izawol:journl:y:2014:p:96 is not listed on IDEAS
    45. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bla:jecsur:v:32:y:2018:i:2:p:335-356 is not listed on IDEAS
    2. Eugen Dimant & Guglielmo Tosato, 2018. "Causes And Effects Of Corruption: What Has Past Decade'S Empirical Research Taught Us? A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 335-356, April.
    3. Eugen Dimant & Tim Krieger & Margarete Redlin, 2015. "A Crook is a Crook … But is He Still a Crook Abroad? On the Effect of Immigration on Destination-Country Corruption," German Economic Review, Verein für Socialpolitik, vol. 16(4), pages 464-489, November.
    4. Mawusse K.N. Okey, 2016. "Corruption And Emigration Of Physicians From Africa," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 41(2), pages 27-52, June.
    5. Marko Danon, 2014. "Constructing a Novel Competitiveness Index for European Regions," GREDEG Working Papers 2014-42, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    6. Daniel Meierrieks & Laura Renner, 2017. "Stymied ambition: does a lack of economic freedom lead to migration?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 977-1005, July.
    7. Ouyang, Alice Y. & Paul, Saumik, 2018. "The Effect of Skilled Emigration on Real Exchange Rates through the Wage Channel," ADBI Working Papers 823, Asian Development Bank Institute.
    8. repec:bla:econpa:v:36:y:2017:i:1:p:60-74 is not listed on IDEAS
    9. repec:ove:journl:aid:11334 is not listed on IDEAS
    10. Marie Poprawe, 2015. "On the relationship between corruption and migration: empirical evidence from a gravity model of migration," Public Choice, Springer, vol. 163(3), pages 337-354, June.
    11. Guzi, Martin & Mikula, Stepan, 2018. "Reforms That Keep You at Home: The Effects of Economic Transition on Migration," IZA Discussion Papers 11369, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Corruption; Emigration; Educational attainment;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jopoec:v:29:y:2016:i:1:d:10.1007_s00148-015-0563-y. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.