Migration, Remittances, and Economic Growth: Evidence From Central Asian Countries

Abstract

In this study, the effect of migration on economic growth is tested by panel data analysis for four Central Asian countries, namely Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan, for the period 2005–2022. One of the most important reasons for the focus of the study on Central Asia is that Central Asia is one of the regions in the world where labor migration is at a very high level in proportion to the population, and as a result, there is a significant number of transfers to the countries of citizenship in proportion to their Gross Domestic Product (GDP). Moreover, one of the common characteristics of labor migration in the region is that the destination is Russia. Thus, the analysis will lead us to more explanatory and clearer conclusions, and the results of the study will help to determine common policies. As a result of the regression analysis conducted with the Driscoll-Kraay estimator for the analysis, it was found that the increase in remittances positively affects economic growth. On the other hand, it is found that trade openness, which is included in the analysis as the ratio of total foreign trade to national income, has a negative effect on growth. The cointegration test confirmed the validity of this situation in the long run. In the causality analysis, a unidirectional causality relationship was found from remittances to GDP. Accordingly, there is evidence that the remittances of workers from abroad make a significant contribution to economic growth.