Date: 2017
Type: Working Paper
The impact of foreign aid on migration revisited
Working Paper, EUI MWP, 2017/05
LANATI, Mauro, THIELE, Rainer, The impact of foreign aid on migration revisited, EUI MWP, 2017/05 - https://hdl.handle.net/1814/46124
Retrieved from Cadmus, EUI Research Repository
While policymakers hope to stem migration flows by giving foreign aid, existing empirical evidence points in the opposite direction: by loosening budget constraints, aid tends to encourage people to emigrate. In this paper, we revisit the aid-migration link using a substantially extended and adjusted econometric approach based on a gravity model of international migration. In contrast to the previous literature, we obtain evidence of a negative relationship between aid and emigration rates. This even holds for the poorer part of recipient countries, which suggests that the budgetary constraint channel does not play a significant role in shaping migration decisions. The most plausible explanation for these contrasting results is that, unlike in previous studies, we use migrant flows rather than migrant stocks as the dependent variable.
Cadmus permanent link: https://hdl.handle.net/1814/46124
ISSN: 1830-7728
Series/Number: EUI MWP; 2017/05
Published version: http://hdl.handle.net/1814/57744