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Does corruption promote emigration? An empirical examination

Listed author(s):
  • Arusha Cooray

    ()

    (Nottingham University Business School)

  • Friedrich Schneider

    ()

    (Johannes Kepler University of Linz)

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.

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File URL: http://link.springer.com/10.1007/s00148-015-0563-y
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Article provided by Springer & European Society for Population Economics in its journal Journal of Population Economics.

Volume (Year): 29 (2016)
Issue (Month): 1 (January)
Pages: 293-310

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Handle: RePEc:spr:jopoec:v:29:y:2016:i:1:d:10.1007_s00148-015-0563-y
DOI: 10.1007/s00148-015-0563-y
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