The Impact of Youth Migration on Azerbaijan's GDP growth

This article will address to the problem of youth migration and its possible effects on GDP and economic growth of Azerbaijan. It will analyze the reasons behind the young people leaving the country, including access to better living conditions, education, improved job opportunities and long-term career prospects. In recent years, migration of youth has become extremely important concern in Azerbaijan, as it faces challenges to keep its skilled labor force. This research will also analyze long-term economic effects of youth migration in human capital development and in labor market. The Vector Autoregression (VAR) model is employed to measure the impact of youth migration on GDP growth from 2010 to 2024.The results indicate that youth migration has severely negative effect on GDP in the long run. This can be explained that a lot of educated and skilled people can leave the home country as well as workforce, which creates problems of brain drain and consequently leads to slowdown in economic growth. On the other hand, the coefficients for short-run effect indicate positive impact of youth migration on GDP growth rate. Migrants send remittances which influence GDP growth positively by increasing domestic incomes of families and their consumption. Moreover, migrants can return with new skills, experiences and connections which can improve productivity. In conclusion, youth migration has both advantages and disadvantages. While migration can create opportunities by the spread of knowledge, extreme emigration can weaken human capital and economic growth of country. Therefore, Azerbaijan should create better opportunities, support non-oil sector development and encourage youth policies to decrease the negative effect of migration.