Unraveling the Nexus between Migration Dynamics and Economic Growth in the Western Balkans- A Panel Data Analysis

Abstract

The aim of this paper investigates the relationship between migration and economic growth for Western Balkans. The methodology used is using panel data for years from 2006 until 2022. Western Balkan countries include Albania, Serbia, North Macedonia, Bosnia and Herzegovina, Kosovo and Montenegro. There will be five independent variables including, Government national income, Net migration, unemployment, fertility rate. In this paper there are microeconomic and macroeconomic variables. The data is taken from WDI (World Data Indicators). For the test and methodology, we used E Views program to run all the tests such are Unit Root Test, Hausman Test, White Test for Heteroscedasticity, Serial correlation, Multicollinearity Test, Panel Granger Causality Test etc. After conducting the tests and final estimation output, the study shows that all of them are significant after the unit root test. One the contrary, after final estimation, three of the variables were found to be significant, GNI and Net Migration, with a positive impact on GDP, and Fertility Rate with a negative impact. Furthermore, Unemployment was found to be statistically significant and was justified by specific literature for each case. Unemployment happens to have a negative relationship. This paper aims to contribute into the literature of migration and economic growth in Western Balkan countries.