Advanced Search
MyIDEAS: Login to save this paper or follow this series

Growth with Endogenous Migration Hump and the Multiple, Dynamically Interacting Effects of Aid in Poor Developing Countries

Contents:

Author Info

  • Ziesemer, Thomas

    ()
    (UNU-MERIT, and Maastricht University)

Abstract

We show empirically that aid given to poor developing countries enhances growth and reduces emigration once several dynamically interacting effects of aid are taken into account in a system of equations. We estimate equations for net immigration flows as a share of the labour force and GDP per capita growth and also for all their regressors including remittances and official development aid. We use dynamic panel data methods for a sample of poor countries with GDP per capita below $1200 (2000) for which aid is about 9.5% of GDP. The partial effects in these regressions are as follows. Remittances enhance net immigration, savings, public expenditure on education and growth, but reduce tax revenues, all as a share of GDP. Net immigration enhances labour force growth and the savings ratio. Official development aid decreases the savings ratio and the per capita GDP growth rate, but it increases investment, public expenditure on education and literacy and also labour force growth. Then we integrate all equations to a dynamic system and run a simulation. The result is an endogenous migration hump with several peaks. In a counterfactual simulation we double aid with the result that for more than a hundred years migration is reduced and the GDP per capita is enhanced, because the positive effects of aid on investment and education dominate the negative direct effects of aid on growth and the unfavourable effects on savings, tax revenues, and labour force growth.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.merit.unu.edu/publications/wppdf/2008/wp2008-057.pdf
Download Restriction: no

Bibliographic Info

Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 057.

as in new window
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:unm:unumer:2008057

Contact details of provider:
Postal: P.O. Box 616, 6200 MD Maastricht
Phone: (31) (0)43 3883875
Fax: (31) (0)43 3216518
Web page: http://www.merit.unu.edu/
More information through EDIRC

Related research

Keywords: International Migration; Remittances; Aid; Growth;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ralph Rotte & Michael Vogler, 2000. "The effects of development on migration: Theoretical issues and new empirical evidence," Journal of Population Economics, Springer, Springer, vol. 13(3), pages 485-508.
  2. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(1), pages 77-114, March.
  3. Hatton, Timothy J. & Williamson, Jeffrey G., 2001. "Demographic and Economic Pressure on Emigration out of Africa," IZA Discussion Papers 250, Institute for the Study of Labor (IZA).
  4. Simeon Djankov & Jose Montalvo & Marta Reynal-Querol, 2008. "The curse of aid," Journal of Economic Growth, Springer, Springer, vol. 13(3), pages 169-194, September.
  5. Rotte, Ralph & Vogler, Michael & Zimmermann, Klaus F, 1997. "South-North Refugee Migration: Lessons for Development Cooperation," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 1(1), pages 99-115, February.
  6. Arjan de Haan, 1999. "Livelihoods and poverty: The role of migration - a critical review of the migration literature," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(2), pages 1-47.
  7. Rapoport, Hillel & Docquier, Frédéric, 2005. "The Economics of Migrants’ Remittances," IZA Discussion Papers 1531, Institute for the Study of Labor (IZA).
  8. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, Elsevier, vol. 40(2), pages 289-329, February.
  9. David Roodman, 2008. "Through the Looking-Glass, and What OLS Found There: On Growth, Foreign Aid, and Reverse Causality," Working Papers, Center for Global Development 137, Center for Global Development.
  10. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers, Centre for Economic Performance, LSE dp0007, Centre for Economic Performance, LSE.
  11. Acosta, Pablo A. & Lartey, Emmanuel K.K. & Mandelman, Federico S., 2009. "Remittances and the Dutch disease," Journal of International Economics, Elsevier, Elsevier, vol. 79(1), pages 102-116, September.
  12. Mutz,Christine & Ziesemer,Thomas, 2005. "Simultaneous Estimation of Income and Price Elasticities of Export Demand, Scale Economies and Total Factor Productivity Growth for Brazil," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 004, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  13. David Roodman, 2007. "Macro Aid Effectiveness Research: A Guide for the Perplexed," Working Papers, Center for Global Development 134, Center for Global Development.
  14. repec:idb:brikps:publication-detail,7101.html?id=25235 is not listed on IDEAS
  15. Mayda, Anna Maria, 2007. "International Migration: A Panel Data Analysis of the Determinants of Bilateral Flows," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6289, C.E.P.R. Discussion Papers.
  16. Hatton, Timothy J & Williamson, Jeffrey G, 2002. "Out of Africa? Using the Past to Project African Emigration Pressure in the Future," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 10(3), pages 556-73, August.
  17. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, Elsevier, vol. 65(1), pages 9-15, October.
  18. Lewer, Joshua J. & Van den Berg, Hendrik, 2008. "A gravity model of immigration," Economics Letters, Elsevier, Elsevier, vol. 99(1), pages 164-167, April.
  19. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers, School of Economics and Management, University of Aarhus 2005-13, School of Economics and Management, University of Aarhus.
  20. Dumont, Jean-Christophe & Martin, John P. & Spielvogel, Gilles, 2007. "Women on the Move: The Neglected Gender Dimension of the Brain Drain," IZA Discussion Papers 2920, Institute for the Study of Labor (IZA).
  21. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, Elsevier, vol. 12(1-2), pages 59-73.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ziesemer, Thomas, 2010. "Net-immigration of developing countries: The role of economic determinants, disasters, conflicts, and political instability," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Ziesemer, Thomas, 2009. "Remittances, lagged dependent variables and migration stocks as determinants of migration from developing countries," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Ziesemer, Thomas, 2012. "The impact of development aid on education and health: Survey and new evidence from dynamic models," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 057, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. Ziesemer, Thomas H.W., 2012. "Worker remittances, migration, accumulation and growth in poor developing countries: Survey and analysis of direct and indirect effects," Economic Modelling, Elsevier, Elsevier, vol. 29(2), pages 103-118.
  5. A. Nurul Hossain & Syed Hasanuzzaman, 2013. "Remittances and investment nexus in Bangladesh: an ARDL bounds testing approach," International Review of Economics, Springer, Springer, vol. 60(4), pages 387-407, December.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2008057. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ad Notten).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.