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Migration, Tied Foreign Aid and the Welfare State

  • Panos Hatzipanayotou
  • Michael S. Michael

In this paper we highlight aspects related to the links between international migration, foreign tied aid and the welfare state. We model migration as a costly movement from an aid-recipient developing country with low income, poor infrastructure, and no welfare system, towards a rich donor, developed country with a well-developed welfare system. Within this model we find, among other things, that the best response of the developed donor country is to increase aid as the co-financing rate by the recipient country increases. When the immigration cost decreases, e.g. due to greater economic integration between the two countries, it is beneficial for the donor country to increase aid.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2005/wp-cesifo-2005-07/cesifo1_wp1497.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1497.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1497
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  1. David E. Wildasin, 2004. "Economic Integration and the Welfare State," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 5(3), pages 19-26, 09.
  2. Lahiri, Sajal & Raimondos-Moller, Pascalis, 1997. "Competition for aid and trade policy," Journal of International Economics, Elsevier, vol. 43(3-4), pages 369-385, November.
  3. Feehan, James P., 1992. "The optimal revenue tariff for public input provision," Journal of Development Economics, Elsevier, vol. 38(1), pages 221-231, January.
  4. Myers, Gordon M. & Papageorgiou, Yorgos Y., 2000. "Immigration control and the welfare state," Journal of Public Economics, Elsevier, vol. 75(2), pages 183-207, February.
  5. Epstein, Gil S. & Hillman, Arye L., 2003. "Unemployed immigrants and voter sentiment in the welfare state," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1641-1655, August.
  6. Michael, Michael S., 2003. "International migration, income taxes and transfers: a welfare analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 401-411, October.
  7. Michael S. Michael & Panos Hatzipanayotou, 2000. "Welfare Effects of Migration in Societies with Indirect Taxes, Income Transfers and Public Good Provision," CESifo Working Paper Series 347, CESifo Group Munich.
  8. M. G. Quibria, 1988. "On Generalizing the Economic Analysis of International Migration: A Note," Canadian Journal of Economics, Canadian Economics Association, vol. 21(4), pages 874-76, November.
  9. Thomas K. Bauer & Astrid Kunze, 2004. "The demand for high-skilled workers and immigration policy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(1), pages 77-88.
  10. Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economics Impact on the Welfare of the Native-Born Population?," CESifo Working Paper Series 1273, CESifo Group Munich.
  11. Wildasin, D.E., 1992. "Income Restribution and Migration," Papers 92-003, Indiana - Center for Econometric Model Research.
  12. Kenji Kondoh, 1997. "Permanent Migrants And Cross-Border Workers -The Effects On The Host Country-," Departmental Working Papers 1997-01, McGill University, Department of Economics.
  13. Agnar Sandmo & David Wildasin, 1999. "Taxation, Migration, and Pollution," International Tax and Public Finance, Springer, vol. 6(1), pages 39-59, February.
  14. William Carrington & Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
  15. Hans-Werner Sinn, 2004. "Social Union, Migration and the Constitution: Integration at Risk," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 5(3), pages 04-11, 09.
  16. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 2002. "Tax burden and migration: a political economy theory and evidence," Journal of Public Economics, Elsevier, vol. 85(2), pages 167-190, August.
  17. Chi-Chur Chao & Eden S.H. Yu, 2002. "Immigration and Welfare for the Host Economy with Imperfect Competition," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 327-338.
  18. Kenzo Abe, 1990. "A Public Input as a Determinant of Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 23(2), pages 400-407, May.
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