Is the External Labor Migration an Economic Growth Factor: Econometric Analysis and Policy Implications for the CIS Countries

Recent intensification of CIS countries instability has led to an intensification of migration flows in the post-soviet space. By providing multidirectional impact on the various growth factors, migration may both accelerate the development of specific countries and slow it down. The paper determines the issue of receiving higher benefit from these processes - either labor-exporting (the countries of Central Asia, Ukraine) or labor-importing countries (Russia). Using international organizations databases and the instrumental variables regression methodology we confirmed the hypothesis that in general in the long term for developing labor-exporting countries high level of labor migration constrains economic growth, although there may occur contrary situation at certain development conditions. The calculated threshold value for labor migrant remittances defines the value that inversely changes the impact of migration process on economic growth. We estimated elasticity coefficients of economic growth for certain countries of Central Asia. We defined practical recommendations to increase economic growth inclusivity of these countries by providing special economic measures, such as accelerating development of small industrial businesses and creating large numbers of new sustainable jobs.