Macroeconomic Determinants of Emigration From Kenya

Abstract

The study examined the determinants of international migration from the viewpoint of one source country by applying a migration gravity model in determining the macroeconomic factors influencing emigration from Kenya to five OECD countries namely;USA,UK,Canada,Australia and Germany during the period 2000-2015.The study applied FEM specification regression techniques in estimating the gravity model and inferences were made based on the FEM as chosen by the joint significance Test.The study found out that high inflation is a significant push factor from Kenya to OECD bloc at the same time low destination inflation rate though insignificant in the study was revealed to be a pull factor. We further found out that an appreciation of the Kenyan currency relative to the respective countries’ currency led to increased migration propensity from Kenya due to perceived low transport and agency costs. The expected positive relationship between emigration and destination GDP per capita was established however, the study found out a contrary finding of the origin GDP per capita being a significant push factor. We established that a rise in remittances resulted to increased migration from Kenya to OECD bloc nevertheless it was statistically insignificant. Destination population size had a positive and significant attractive effect for emigration from Kenya in line with the gravity intuition. By considering the relative economic attractiveness of the individual countries for Kenyan emigrants to settle at, we found out that Australia is the most attractive, followed by Canada, then UK and finally Germany. When emigration was considered over time, there was generally a positive trend except for the year 2007 which was negative. It’s worth noting however the long term trend overtime could not be established since there was rise and fall in emigration trend in close succession of subsequent years. Finally, we found out that if all the macroeconomic factors were held constant there will be a significant decline in emigration from Kenya, therefore we do conclude that besides other factors determining emigration Economic factors do also play a key role.