How Foreign Aid Affects Migration: Quantifying Transmission Channels

Léa Marchal (), Claire Naiditch and Betül Simsek

No 02-2022, EGEIWP from Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro"

Abstract: This is the first global study that quantifies the transmission channels through which foreign aid impacts migration to donor countries. We estimate a gravity model derived from a RUM model, using OECD data between 2011 and 2019 and an instrumentation strategy. Our identification takes advantage of data on multilateral aid provided by multilateral agencies which is non-donor specific. We find evidence that aid donated by a country increases migration to that country through an information channel. If that channel were the only one at play, a 1% increase in bilateral aid would induce a 0.17% increase in migration. In addition, a 1% increase in multilateral aid reduces migration from the less poor origin countries by 0.05% via a development channel.

Keywords: Aid; Gravity; Migration (search for similar items in EconPapers)
JEL-codes: F22 F35 O15 (search for similar items in EconPapers)
Pages: 31
Date: 2022-11, Revised 2023-01
New Economics Papers: this item is included in nep-fdg and nep-int
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Related works:
Working Paper: How Foreign Aid Affects Migration: Quantifying Transmission Channels (2022)
Working Paper: How Foreign Aid Affects Migration: Quantifying Transmission Channels (2022)
Working Paper: How Foreign Aid Affects Migration: Quantifying Transmission Channels (2022)
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