Foreign Aid and Migration

Andreas Fuchs, Gröger, André, Tobias Heidland and Lukas Wellner
Authors registered in the RePEc Author Service: André Gröger

No 19332, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Wealthy nations increasingly fund foreign aid to address the 'root causes' of migration despite a lack of scientific evidence about its effectiveness. Combining georeferenced World Bank project data (2008–2019) with migration preferences of one million individuals and bilateral flows, we identify the causal effects of aid using event studies and instrumental variables. In the short term, aid raises optimism and institutional trust, reducing migration preferences and asylum flows. In the longer term, aid raises incomes, increasing regular migration, consistent with the 'mobility transition.' Aid can shape migration, but redirects rather than reduces it, with effects reversing over time.

Keywords: Foreign; aid (search for similar items in EconPapers)
JEL-codes: F22 F35 O15 O19 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-fdg
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