The Effects of Migration on Unemployment: New Evidence from the Asian Countries

Abstract

Asian countries have emerged as a new force in the global economy for the past three decades. However, these Asian countries have experienced fundamental problems arising from migration and unemployment. While the effects of migration on unemployment have been extensively investigated for the EU and OECD countries, these effects in the context of the Asian nations have largely been under-examined. This paper investigates the impacts of migration on unemployment in 47 Asian countries for the 1990–2020 period. Various estimation techniques are used in this study, including fixed-effects and random-effects models, as well as generalized least squares and generalized method of moments (GMM). The empirical findings show that migration reduces unemployment in Asian countries when all 47 countries are jointly considered. However, when countries are separated into different groups based on income levels, migration increases unemployment in low-income and low-middle-income countries such as India, Indonesia, the Philippines, and Vietnam. Economic growth is also shown to reduce unemployment in Asian countries, regardless of the estimation techniques. Policy implications have emerged based on our analysis, including a major reform in education for low-income and low–middle-income countries to ensure that workers in these countries are ready for jobs when facing a flow of migration workers who migrate for a better economic outcome.