The Drivers of International Migration to and from the UK: A Panel-Based Bayesian Model Averaging Approach
Relatively little is known about the factors behind the level of international migration to and from the UK, despite the rapid growth in the number of migrants seen in recent years. Accordingly, we develop econometric models to examine across time the determinants of international migration between the UK and 14 different regions. In particular, we explore the robustness of economic and policy variables in explaining migration. We find that standard empirical models of migration ignore both significant heterogeneity across source/destination countries in the determinants of migration and significant model uncertainty.
Using a heterogeneous Bayesian model averaging approach we identify the key drivers of UK immigration and emigration. Almost all the increase in net immigration over the last decade is accounted for by a rise in immigration into the UK from the Asian Commonwealth, Other Asia (including China) and the A8 alone. This increase does not appear to be driven by the performance of the UK or other economies. Rather, our approach indicates that three-quarters of this increase is associated with structural change, which may be attributed to UK immigration policy and immigration policy in other migrant host countries. The remainder of this rise in net immigration is largely accounted for by ‘friends and family’ effects.
While the data do point to the importance of particular economic drivers of immigration, we show that there are considerable uncertainties associated with forecasts of migration, not least because of the importance of policy, which is difficult to predict, in explaining migration.