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Interrelationships between Human Capital, Migration and Labour Markets in the Western Balkans: An Econometric Investigation

Author

Listed:
  • Michael Landesmann

    (The Vienna Institute for International Economic Studies, wiiw)

  • Isilda Mara

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The high outward mobility that has characterised the countries in the Western Balkan (WB) region over the past three decades is often seen as tightly linked to severe labour market imbalances and persistently low utilisation of human capital over time. To shed light on these issues, we estimate a system of equations that accounts for the effects of labour market determinants and human capital on migration and vice versa. The period under analysis is 2005-2019 and considers mobility from five of the WB countries to the EU15. The empirical results confirm the importance of wage gaps and their changes as an important pull factor for driving outward mobility from the WB region that can be persistent over time. Also, gaps in human capital emerge as a powerful determinant for explaining mobility into countries where returns on human capital are higher.

Suggested Citation

  • Michael Landesmann & Isilda Mara, 2021. "Interrelationships between Human Capital, Migration and Labour Markets in the Western Balkans: An Econometric Investigation," wiiw Working Papers 196, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:196
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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