The Effect of Net Migration on the Population-Growth Relationship in Indonesia

This paper empirically examines the relationship between population growth and economic growth in Indonesia by considering lagged fertility and net migration as potential explanatory variables. In this way, we successfully differentiate the short-run and long-run effects of population growth on economic growth. In particular, our focus is on the effect of net migrants on the correlation between the two variables, since extensive migration policies have been taken nationwide in Indonesia. The results suggest that lagged fertility does not affect the two-variable analysis. In contrast, once net-migrants are incorporated into the regression model, we obtain the significance of both its coefficient and negative correlation between population growth and economic growth. The results not only support both Malthusian and Non-Malthusian schools of thought but also suggest that net migration is a key determinant of economic growth in Indonesia.