Aid as a Migration Policy Tool

Léa Marchal (), Claire Naiditch and Betül Simsek ()
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Léa Marchal: Université Paris 1 Panthéon-Sorbonne, CNRS, Centre d'Economie de la Sorbonne
Betül Simsek: Institute of Law and Economics - Hamburg University

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: Foreign aid is often promoted as a way to curb emigration by improving welfare in countries of origin. However, the effectiveness of such a policy remains debated. To contribute to this debate, we develop a random utility maximisation model yielding a gravity equation, which we estimate using OECD migration and aid data for 2011-2019. We exploit the differences between bilateral aid and multilateral aid, for which donors are masked, to isolate the donor-specific and non-donor-specific effects of aid on migration. We show that aid increases rather than reduces migration. The donor-specific channel plays a dominant role in explaining this positive effect, which is primarily conveyed through an information channel

Keywords: Aid; gravity; migration; RUM (search for similar items in EconPapers)
JEL-codes: F22 F35 O15 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2025-06
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