Aid as a Migration Policy Tool

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Authors: Léa Marchal, Claire Naiditch, Betül Simsek
Cited by: 0
References: 81

Abstract

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 the positive effect of aid on migration, primarily through an information channel.

Fields of Study & Subjects

International Development and Aid Migration and Labor Dynamics Global trade and economics

Publication details

Journal / source
World Economy
Volume
49
Issue
3
Pages
607–635
Publication date
14 January 2026
Language
EN