The relationship between international migration and labor market: An empirical application

In addition to the rapidly increasing population problem, migration problems have become more prominent in recent years due to the refugee crisis and increasing migration movements. Whatever their origin, migrations have significant impacts on society and these can be controversial. From an economic perspective, migrations can contribute to both consumer demand and the demand for labor used in the production of goods and services. Discussions about the economic effects of migration are extremely important in policy making in areas such as education and employment. Therefore, the aim of this thesis is to empirically examine the economic effects of the relationship between international migration and labor market in the 7 countries with the highest number of immigrants, based on the period 1990-2019. In this direction, econometric models based on Durbin-H, which takes into account the cross-sectional dependence between the units forming the panel, and CCE techniques that allow the estimation of heterogeneous coefficients were used. The causality relationship between the series was analyzed with the bootstrap panel causality test developed by Kónya. Findings from the estimators show that the labor market has an impact on international migration. Based on these findings, it has been concluded that countries with a deficit in the labor market and large capitals cause international migration.In addition, the findings from the causality analysis show that there is a unidirectional causality relationship from migration to wages. This finding shows that the migration movements in the mentioned countries have the power and capacity to change wage levels. The study also provides findings consistent with the neoclassical macroeconomic migration theory, which argues that international migration is caused by the differences in wages between labor-rich and capital-rich countries