Academic journal article Contemporary Economic Policy

What Determines Migration Flows from Low-Income to High-Income Countries? an Empirical Investigation of Fiji-U.S. Migration 1972-2001

Academic journal article Contemporary Economic Policy

What Determines Migration Flows from Low-Income to High-Income Countries? an Empirical Investigation of Fiji-U.S. Migration 1972-2001

Article excerpt

I. INTRODUCTION

There are several studies that have examined the flow of migrants from low-income to high-income countries. These studies have considered the effect of the transfer of human capital on the countries of origin and destination, the value of the transfer of human capital, the effect of government policies, and the reasons for migrant flows (see Gani and Ward 1995). The last group includes studies of the determinants of migrant flows from low-income countries to the United States (Huang 1987; MacPhee and Hassan 1990), low-income countries to Canada (DeVoretz and Maki 1983; Akbar and DeVoretz, 1993), and from Fiji to New Zealand (Gani and Ward 1995; Gani 1998; Narayan and Smyth, 2003). Though the United States has traditionally been a major recipient of migrants from Fiji, to date there are no studies of the determinants of migrant flows from Fiji to the United States. The objective of this article is to fill this gap in the literature through presenting estimates of the long-run and short-run elasticities of the determinants of migration from Fiji to the United States for the period 1972 to 2001.

The authors study migration flows from Fiji for three reasons. First, Fiji is an interesting case study because it allows the authors to compare the relative importance of economic and political factors in motivating migrants' decisions. This is because apart from the usual economic factors that motivate people to migrate from low-income to high-income countries, Fiji experienced two political coups in 1987 and another coup in 2000 that have led to less political freedom and increased political instability.

Second, over the 15 years since the first coups, Fiji has experienced a mass exodus of migrants, which is a major policy problem for Fiji. Between 1987 and 2001 75,800 Fiji citizens migrated, which is an annual average of over 5,000 people (Reserve Bank of Fiji [RBF] 2002, p. 40). This is almost 10% of Fiji's entire population, which was 775,000 people in 2001. There was a further jump in migration following the May 2000 coup, with 16,200 Fijians immigrating between May 2000 and October 2002 and another 1,800 Fijians immigrating in the first three months of 2003. (1)

Third, official figures indicate that 11% of the migrants leaving Fiji each year are skilled professionals (RBF 2002, p. 40). Because Fiji has a low human capital base, the International Labour Organisation (ILO) and the World Bank, among others, have expressed concerns about the effect that the scale of immigration is having on Fiji's supply of skilled manpower (House 2001; World Bank 1995). The ILO suggests that half of Fiji's stock of middle and high-level workers have left Fiji (House 2001). One report indicates that on average Fiji is losing US$25.4 million per annum through immigration from expenditure on education, training, and immigrants' transfers and legacies alone. (2) This is a sizable amount of money, representing 2% of Fiji's gross domestic product (GDP). At a broader level, the issue of "brain drain" is a major problem in several developing countries. There are at least 1.5 million skilled expatriates from developing countries employed in Western Europe, the United States, Australia, and Japan (National Foreign Intelligence Board [NFIB] 2001, p. 22). The sheer number of migrants and its effect on Fiji's human capital suggests that further study of the causes of immigration is warranted.

The balance of the article is organized as follows. The next section considers migrant flows from Fiji in more detail. Section III outlines the empirical specification used to examine migration from Fiji to the United States and discusses the data. The details of the econometric methodology and empirical results are contained in section IV. Section V contains a summary of the main findings together with some policy implications.

II. THE FIJI CONTEXT

Prior to the first coups in 1987 there was a sprinkling of studies on outward migration from Fiji. …

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