The effect of emigration on economic growth: The case of India

With the globalization activities that gained momentum in the post-1980 period, the globalization of goods and capital, as well as the globalization of labor markets, has enabled. In this context, while production and capital are changing direction, the phenomenon of migration, which includes mostly labor flows, has also become one of the main issues of internationalization by moving from national to international scale. In the explanation of the act of migration, there is an indirect debate between the concepts of mobility that occur due to "change in where people live" and "individuals' decisions to change their place of residence". Migration is one of the most important issues in the contemporary global economy. Currently, 258 million people are estimated to be out of their own country. Migration is often the result of economic and social change. In some cases, migration can lead to development with improved economic and social conditions, while sometimes alternatively it can lead to continued or even increased stagnation and inequality. The migration flows, which vary according to the level of immigrant and recipient country, create direct and indirect effect on employment and growth in this countries of migration. In 2003, the Global Development Finance report was the turning point that brought the migration and development debate on the agenda. The report emphasized the relative importance of remittances in the development of developing countries. Remittances, which tend to increase continuously in the world, affect the economies which accept high remittances in many ways. Therefore, many studies have been put forward regarding the macroeconomic effects of remittances for reason that relationship between migration and economic growth is examined in this study. According to the data in the International Organization for Migration (IOM) 2020 Report, India was the country with the highest number of migrants in 2018. For this reason, data from the Indian economy were used in the empirical analysis part of the study. The relationship between India's migration remittances between 1980 and 2019, foreign direct investment, exports and imports, and gross fixed capital formation, which is equal to the sum of public and private sector investments, is examined. As a result of the Johansen cointegration test, it has been determined that there is a long-term positive relationship between capital formation and migrant remittances. Therefore, policymakers should endeavor to improve the macroeconomic environment to promote the flow and benefits of remittances in India to support the country's economic growth.