Unveiling Sri Lanka’s brain drain and labour market pressure: A study of macroeconomic factors on migration

by Sandunima Kaluarachchi, Ruwan Jayathilaka

The purpose of this study is to explore the impact of GDP per capita income (GDPPCI), unemployment, higher education (HE), and economic growth (EG) on migration in Sri Lanka. Numerous global and local studies have explored the influence of macroeconomic and socioeconomic factors on migration. In the Sri Lankan context, fewer studies have probed the impact of GDPPCI, unemployment, HE, and EG on migration, particularly concerning brain drain and domestic labour market pressure. An applied research methodology was adopted, utilising annual data from 1986 to 2022. The statistical data were sourced from reports by the Sri Lanka Bureau of Foreign Employment (SLBFE), the Central Bank of Sri Lanka (CBSL), Labor Force Survey Data from the Department of Census and Statistics (LFSDCS), and University Grants Commissions (UGC). This study utilised the Vector Error Correlation model (VECM), Vector Auto-regression (VAR), and Granger Causality test through STATA. The empirical findings of the VAR model highlighted that GDPPCI and EG negatively impact migration, whereas unemployment and HE positively affect migration. The study’s implications demonstrated that GDPPCI, unemployment, HE, and EG were the primary factors influencing the country’s migration decisions. These findings will hopefully inform and guide the Sri Lankan government and policymakers for more effective decision-making.