Determinants of Net Migration Rates in the Western Balkan: An Analysis of Economic, Demographic and, Educational Factors

Abstract

ii This study investigates the determinants of net migration rates across seven Western Balkan countries such as Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia, and Croatia focusing on the time period 2011–2023. Implementing a panel data regression framework, the analysis shows how key macroeconomic indicators such as GDP growth, unemployment rate, and population growth and educational attainment influence net migration rates. The model specification is chosen based on the results of the Hausman test, which supports the use of a random-effects model. The methodology accounts for unobserved heterogeneity across countries and time periods and applies robust estimation techniques to address potential heteroskedasticity. The empirical findings show that population growth is significantly associated with increased net migration rates, while higher unemployment reduces them. GDP growth, though positively signed, does not show a statistically significant effect. The regression results indicate that the model explains approximately 20.1% of the variation in net migration (F = 7.3013, p < 0.001), highlighting the role of macroeconomic conditions in shaping migration dynamics in the Western Balkans. Educational attainment was initially considered but excluded from the final model due to multicollinearity concerns. These insights are valuable for policymakers aiming to retain human capital and address demographic challenges through targeted economic and labor market interventions.