MIGRATION AND BILATERAL TRADE FLOWS: EVIDENCE FROM INDIA AND OECD COUNTRIES

Abstract

Migration from developing countries to developed countries is not a new phenomenon. The causes of migration has been well explained by many authors. The rate of population growth and the proportion of youth in the population, their education and training, employment opportunities, income differentials in society, communication and transportation facilities, political freedom and human rights and the level of urbanization are the important causes of migration (Samuel and George 2002). According to Kaur (2013), among developing countries, South Asia is considered the hub of migrant workers because of populated countries like India, Bangladesh etc. These migrant workers help make up for the shortage of labour in the developed world and their remittances are major sources of foreign exchange reserves for South Asian countries. The study revealed that during the study period (1980-2010), remittances did not result in a reduction in poverty. Although remittances are considered as a tool of poverty reduction, the slow trickle down effects in these countries may be the one of the reasons for the negative relation.