Staff Working Paper No. 729
By John Lewis and Matt Swannell
We estimate a gravity model of the determinants of migration flows using pairwise data from around 160 origin countries to 35 advanced economy destinations over the period 1990-2013. When we interact the various explanatory variables with freedom of movement we find that the elasticities of migration with respect to macroeconomic variables are not constant across country pairs. Under freedom of movement, the response to macroeconomic variables is stronger, and the response to distance and historical migrant stocks is weaker. However, the elasticity with regard to linguistic and historical variables does remain constant. Alongside macro variables commonly used in the literature, we also find a significant role for expected GDP growth. Migration flows are higher to destinations with stronger expected GDP growth, and from origins with weaker expected GDP growth. In addition, greater labour market flexibility in destination countries is associated with higher inward migration.
The macroeconomic determinants of migration