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How Foreign Aid Affects Migration: Quantifying Transmission Channels
Archive ouverte : Autre publication scientifique
Edité par HAL CCSD ; Centre d'Économie de la Sorbonne (CES - UMR8174)
URL des Documents de travail : https://centredeconomiesorbonne.cnrs.fr/publications/. Documents de travail du Centre d'Economie de la Sorbonne 2022.22 - ISSN : 1955-611X. 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.
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