The Relationship Between Migration and Wages in Georgia 2010-2025: An Econometric Analysis

Abstract

This paper examines the relationship between migration and wages in Georgia using quarterly data for the period 2010–2025. Given the complexity of the causal links between the variables, the analysis proceeds incrementally - from a static model to dynamic specifications: Ordinary Least Squares (OLS), an Autoregressive Distributed Lag Model (ARDL) with an Error Correction Mechanism (ECM), and a Vector Autoregression (VAR/VECM) model are applied sequentially. The results show that migration exerts a positive and statistically significant effect on wages in both the short and the long run. Impulse-Response function and variance decomposition analyses confirm a bidirectional relationship between the variables, indicating that wages act as a significant determinant of migration flows over the long term. The consistent conclusion across all estimated models confirms the reliability and robustness of the findings.