Modelling Immigration Flows: An Application of the Bounds Test to Fiji-Australia Migration

Abstract

This paper examines the long-run and short-run determinants of migration from Fiji to Australia between 1972 and 2001 using a human capital framework, which is extended to take account of political instability in Fiji. Our main findings are that in the long run the real wage differential and political instability in Fiji are the main determinants. In the short run, there is some evidence that the wage differential and transport costs are important factors, but this finding is not robust across all specifications. Lagged migration and political instability are the most important determinants in the short run.