Abstract:
This study investigates the impact of the labor market and education on
migration in Sri Lanka during the period from 1996 to 2020. In order to
analyze the objective of the research, Augmented Dicky-Fuller (ADF) and
Phillips-Perron (PP) tests were used to check the stationary property of data,
the Johansen Co-integration Test was used to find the long-run relationship,
and an error correction model was employed to test the long-run adjustment
and short-run dynamics of NM (Net Migration Rate). A Granger Causality
Test was employed to check the causality relationship between the variables.
This study used Net Migration Rate (NM) as an endogenous variable and
unemployment rate (UN), labor force participation rate (LFP), wage rate
(WG), and education index (EDUI) as independent variables. This study found
that there is a positive relationship between the unemployment rate, labor force
participation rate, education index, and the net migration rate. In addition to
the wage rate, which has a significant negative relationship with the net
migration rate in both the long and short runs, there is uni-directional causality
between the unemployment rate, the education index, and the net migration
rate. Hence, this study recommends that both labor markets and education can
be used as policy tools to mitigate migration from Sri Lanka in the long and
short run.
