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Managing Migration Flows Through Foreign Aid

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  • Marchal, Léa
  • Naiditch, Claire
  • Simsek, Betül

Abstract

This paper investigates through which channels foreign aid impacts migration to donor countries. To disentangle the non-donor-specific channels (development and credit constraint channels) from the donor-specific channels (information and instrumentation channels), we use the fact that multilateral aid is not donor-specific contrary to bilateral aid. We estimate a gravity model derived from a RUM model of migration using an IV-2SLS strategy and the DEMIG-C2C and AidData datasets. We find that aid donated by a country increases migration to that donor through an information channel and especially for the poorest recipient countries. In addition, we find that aid weakly reduces migration to any country via a development channel.

Suggested Citation

  • Marchal, Léa & Naiditch, Claire & Simsek, Betül, 2021. "Managing Migration Flows Through Foreign Aid," ILE Working Paper Series 46, University of Hamburg, Institute of Law and Economics.
    • Handle: RePEc:zbw:ilewps:46
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    More about this item

    Keywords

    Aid; Gravity; Migration;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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