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Aid as a Migration Policy Tool

Author

Listed:
  • Léa Marchal

    (Université Paris 1 Panthéon-Sorbonne, CNRS, Centre d'Economie de la Sorbonne)

  • Claire Naiditch

    (Université Lille, CNRS, IESEG School of Management, LEM; Institut Convergences Migrations)

  • Betül Simsek

    (Institute of Law and Economics - Hamburg University)

Abstract

Foreign aid is often promoted as a way to curb emigration by improving welfare in countries of origin. However, the effectiveness of such a policy remains debated. To contribute to this debate, we develop a random utility maximisation model yielding a gravity equation, which we estimate using OECD migration and aid data for 2011-2019. We exploit the differences between bilateral aid and multilateral aid, for which donors are masked, to isolate the donor-specific and non-donor-specific effects of aid on migration. We show that aid increases rather than reduces migration. The donor-specific channel plays a dominant role in explaining this positive effect, which is primarily conveyed through an information channel

Suggested Citation

  • Léa Marchal & Claire Naiditch & Betül Simsek, 2025. "Aid as a Migration Policy Tool," Documents de travail du Centre d'Economie de la Sorbonne 25015, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:25015
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    File URL: http://mse.univ-paris1.fr/pub/mse/CES2025/25015.pdf
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    File URL: https://shs.hal.science/halshs-05132952
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    More about this item

    Keywords

    Aid; gravity; migration; RUM;
    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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