Estimating the Impact of International Sanctions on Migration Flows Using Dynamic Panel Regression Method

Abstract

The study estimates the impact of different types of international sanctions on migration flows. We use data on 1325 cases of international sanctions imposed against 168 countries for the period of 1950 to 2021. Next, the U.S. sanctions are taken as a representative sample out of all cases, reflecting 87 % of cases of sanctions imposed by the OECD over the past 30 years. Using dynamic panel regression, we estimate the effect of different types of sanctions (trade sanctions, financial sanctions, travel sanctions, and other sanctions) on migration flows in sanctioned states. To our knowledge, this is the first study on sanctions impact of migration that differentiates sanctions by type. According to the results, only financial sanctions lead to a significant reduction in net migration for sanctioned states. The effect of the U.S. financial sanctions on net migration is estimated at – 5.22 people per thousand people of total population. The effect is explained by the negative impact of sanctions on the standard of living and the degree of integration of the national financial system into the global financial markets. In the case of restrictions on trade flows and travel, the absence of a negative effect from US sanctions indicates the presence of closer trade and migration ties with third countries compared to the US. The results of the study reveal the importance of factors such as trade and financial sanctions in construction of models involving migration flows. The estimates indicate potential for influx of labor migrants to Russia and the relevance of developing measures to attract them.