Is there a causality between emigration and other mobility factors?: a panel VAR model approach for Baltic and Scandinavian countries

Abstract

This paper analyzes causality relationships between mobility factors such as emigration, trade balance, export, foreign direct investment and remittances received. A panel VAR model is developed for a group of Scandinavian and Baltic countries (7) to test for causalities between those mobility factors in 1999-2014. The presence of cointegration is tested using the Fisher-Johansen cointegration test. The Wald test is also employed to provide evidence on whether there are any causalities between variables. The results showed no long run associationship between mobility factors and the presence of only one causality relationship, namely the causality running from remittances received to emigration. In this sense remittances usually help to trigger an initial or more massive migration in the first place, and later, the persistence of imbalances or migrants networks contribute to the migration process's continuation.Therefore, as an effective migration policy in a short run we recommend promotion and the use of remittances received in activities related to improve productivity of any sector. This is to avoid higher migration and also to reduce poverty in sending countries. In addition, when the imbalances are reduced, such policies promote family reunifications so that to reinforce migrant networks.