Brain drain or economic gain? Untangling the global migration-growth puzzle through causality and time-frequency lenses

Abstract

This study investigates the complex causal relationships between net migration and economic growth at the global, income group, and country levels, framing these dynamics within the evolving landscape of global economic integration and disparities, thereby addressing the enduring “brain drain or economic gain” debate. The analysis is conducted employing the latest available panel data from 1990 to 2023 for 154 countries. Additionally, several advance analytical techniques including Juodis, Karavias and Sarafidis non-causality test and Wavelet Transform Coherence is utilised to investigate relationships across multiple scales and time frequencies. To the best of the authors’ knowledge, no prior research has examined these dynamics using these methods. Additionally, a novel visualisation technique called Lucius Jesper Chloe heatmap, was utilised to depict the Granger causalities. The findings confirm a relationship between migration and economic growth on a global scale. Further analysis reveals bidirectional and unidirectional relationships within income groups and countries. Finally, implications are made for policymakers to develop economic policies that leverage the economic potential of migration and vice versa.