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Human Capital Outflow and Economic Misery: Fresh Evidence for Pakistan

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Abstract

This paper visits the impact of economic misery on human capital outflow using time series data over the period of 1975–2012. We have applied the combined cointegration tests and innovation accounting approach to examine long run and causal relationship between the variables. Our results affirm the presence of cointegration between the variables. We find that economic misery increases human capital outflow. Foreign remittances add in human capital outflow from Pakistan. The migration from Pakistan to rest of world is boosted by depreciation in local currency. Income inequality is also a major contributor to human capital outflow. The present study is comprehensive effort and may provide new insights to policy makers for handling the issue of human capital outflow by controlling economic misery in Pakistan.

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Notes

  1. Akhmet et al. (2013) also reported that economic growth affects social health indicators in long run.

  2. Mostly in developing countries, devaluation affects domestic prices (see for more details).

  3. Non-availability of data on unskilled migrated workers has restricted us to use highly qualified, highly skilled and skilled professionals.

  4. See Shahbaz et al. (2013).

  5. Shahbaz et al. (2013) noted that devaluation deteriorates income distribution in Pakistan.

  6. Results are available upon request from authors.

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Acknowledgments

The authors/author is/are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the paper. Usual disclaimers apply.

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Authors and Affiliations

  1. School of Social Sciences, National College of Business Administration and Economics, 40/E-1, Gulberg III, Lahore, 54660, Pakistan

    Amjad Ali

  2. Department of Economics, University of Karachi, Karachi, Pakistan

    Nooreen Mujahid

  3. College of Engineering, Salman Bin Abdulaziz University, Al-Kharj, 11942, Kingdom of Saudi Arabia

    Yahya Rashid

  4. Department of Management Sciences, COMSATS Institute of Information Technology, Lahore, Pakistan

    Muhammad Shahbaz

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  1. Amjad Ali
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  4. Muhammad Shahbaz
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Correspondence to Yahya Rashid.

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Ali, A., Mujahid, N., Rashid, Y. et al. Human Capital Outflow and Economic Misery: Fresh Evidence for Pakistan. Soc Indic Res 124, 747–764 (2015). https://doi.org/10.1007/s11205-014-0821-5

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