The Role of Political Stability, Labor Market and Education on Migration: The Empirical Evidence from Sri Lanka

T Thanabalasingam

doi:10.5296/ber.v10i2.16988

Abstract

This study employs annual data from Sri Lanka over the period of 1990 – 2018 in order to investigate the impact of political instability and the existence of violence, unemployment rate, wage differential and level of education on migration. ADF unit root test confirmed that none of the variables are I(2), which allows us to examine the long run relationship between the variables using Autoregressive Distributed Lag (ARDL) Bound testing method. AIC is suggested to adapt ARDL (1, 0, 0, 2, 0) model among the top 20 models. ARDL Bound testing approach identified the cointegrating relationship between the variables. The results of both ARDL Bound test and the ARDL version of ECM detected that unemployment rate, political instability and the existence of violence/terrorism and level of education have a positive and significant impact on net migration whereas wage differential do not have significant impact on it even though it affect the net migration negatively both in the long run and in the short run respectively. Also, the coefficients of long run results and the Wald test confirm that the impact of unemployment rate is higher than wage differential, political instability and level of education on net migration in the long run. The result of CUSUM test of selected ARDL model discloses that the estimated model is stable and this model passes the all the diagnostic test. Moreover, Granger causality test identified a causal relationship that stemming from unemployment to net migration, wage differential to net migration, political instability to net migration and level of education to net migration. These findings could be useful to policy makers when they formulating and implementing the policy related to labor markets and good governance.

Highlights

Improving the allocation of human resources is called as migration
The above results reveal that unemployment rate, education index and political instability and the existence of violence/terrorism have a positive and statistically significant impact on net migration
The domestic labor market may not support to educated people to find good job with sufficient wage or political situation of the country may motivated them to migrate internationally or many of them emigrate by the purpose of higher/ post graduate education and not back to their home country

Summary

Introduction

People living in area where they are not fully employed or partially employed are expected to move to termini that having brighter futures. Both migration analysts and policymakers seem to have mixed views as to whether private market forces are only adequate to encourage them to do so. People living in places where they face security issues due to political instability expected to move to destinations. Youngers are expected to change their destination for their educational purposes (under graduate and post graduate). Migratory patterns are clearly part of the history and cultural links of a country, its political and legal framework, socio-economic characteristics, its cultural specificities and the stage in the economic cycle and economic activity

Objectives

Results

Conclusion