Emigration and origin country economic institutions

Abstract This paper empirically examines the impact of emigration to OECD countries on 132 origin countries’ economic institutions, as measured by the economic freedom index. We utilize public choice theory to explore how emigration can affect origin country economic freedom through voice and exit via absence, diaspora, prospect, and return channels. We then estimate the association between accumulated emigrant stocks and the subsequent changes in economic freedom and the association between contemporaneous emigrant flows and changes in economic freedom and investigate how these associations vary by emigrant skill. We find that for all skill levels, larger emigrant stocks are consistently positively associated with larger subsequent improvements in economic freedom but that at high levels of emigrant stocks these improvements diminish.