The potential effect of rising house prices on the out-migration of tertiary-educated students

Abstract

Ever since the 1980s, the local housing market has exhibited a general upward trend in pricing, whereby property pricing have almost tripled over the past eighteen years alone (based on the Central Bank of Malta’s Property Price Index, building on advertised pricing). In turn, the exhibited augmentation created the recent traction, whereby governmental authorities and international bodies alike assessing the ‘issue’ in terms of numerous potential spill-overs; none of which analysing the potential effect on the migration patterns of the local populace, and even more so, the effect on the theoretically-most mobile group of our society, i.e. the young, and more-educated individuals (as educational-selectivity-in-migration proclaims). From a general perspective, migration-related literature has defined several main factors driving the multi-directional flow of individuals between countries and/or regions; including income differentials, job progression, age, amenities, gender, geographical proximity, network effects and past migration. In this study, the potential effect of the exhibited augmenting trend in the local housing market on the migration propensities of individuals that will in the near future form part of the highly-educated populace, is assessed. By conducting a survey-based analysis on the current share of the population enrolled in tertiary-education institutions, two sets of results have been obtained and subsequently analysed. Initial qualitative analysis underlines certain language dynamics, preferences towards EU-countries, sensitivity towards family-and-friend effects, house pricing, income opportunities, job progression and education progression, and other individual-specific factors. Furthermore, by employing a binary (cumulative) logistic model with the individual’s willingness to migrate as the dependent variable and house pricing as one of the regressors, the individual statistical significance and marginal effect illustrating the probability of migrating given the subjective beliefs on house pricing have been tested and obtained, respectively. For further evaluation, the optimised final model was additionally modified by constraining the estimation assumption underlying the binary property of the house pricing variable, in two different degrees. Econometric estimation of the final model and its variations, show that house pricing, job progression, and educational progression/prospects are significant at the five percent level, with network effects and gender significant at the ten-percent level. The derived marginal effects for house pricing also demonstrate the different impacts based on the individual’s responses.