Aid and Migration: Substitutes or Complements?

Skilled migration and economic performances: Evidence from OECD countries

“…Table 3 shows the results from the estimated equation (2). 28 All the explanatory variables are strongly significant and, as we expected, bilateral aid positively affects migration flows from origin to destination country, this is coherent with results in Berthelemy, Beuran and Maurel (2009). The stock of immigrants in destination countries in 1991 has a positive effect on migration flows confirming a well known result in literature (Card, 2001).…”

“…As in Berthelemy, Beuran and Maurel (2009) bilateral aid is expected to have a positive effect on bilateral migration flows through the so called "attraction" effect: more bilateral aid from a "rich country" (destination country in our setting) to a "poor country" (origin country in our case) intensifies the attractiveness of the donor for workers in the "poor countries"; moreover bilateral aid increases the information in poor countries about the donor and it will reduce migration costs. The stock of immigrants in destination country in 1991 (immi_stock d,1991 ) is expected to have a positive effect on bilateral migration because immigrants already living in the destination country reduce the cost of information on how to get a job in the new country, on social system, immigration policy and culture.…”

“…As anticipated in the former section we build these two instruments by estimating bilateral flows of both total and skilled migration using geographic and strictly exogenous determinants. An instrumental variable has 20 In fact geographic variables as distance, past colonial relationship, common language are shown being good migration determinants (Mayda, 2008;Berthelemy, Beuran and Maurel, 2009;Ortega and Peri, 2009) and they could be used only by estimating bilateral immigration flows.…”

“…So we estimated the bilateral inflows of immigrants by using two sets of explanatory variables: one set of variables explaining total immigration (both high and low skilled immigrants inflows), the other set explaining high skilled immigrants' inflows. In defining the set of variables explaining the overall bilateral migration flows (equation (2)) we use three main features in literature: (i) migration is positively correlated with bilateral aid (Berthelemy, Beuran and Maurel, 2009); (ii) migration is positively correlated with past immigrants settlements (Card, 2001;Beine, Docquier and Ozden, 2009); (iii) geographic variables are important to estimate bilateral migration flows (Mayda, 2008;Berthelemy, Beuran and Maurel, 2009; 21 Moreover the simple correlation index between per capita GDP and overall international aid by each destination countries is 0.196. Ortega and Peri, 2009).…”

The Impact of Development Aid on the International Migrations in the African, Caribbean, and Pacifi c Group of States

“…They showed that aid, which increases growth in recipient countries, would not necessarily reduce migration fl ows. Berthélemy, Beuran and Maurel (2009) researched if aid and migrations are substitutes or complements. They concluded that aid fl ows increase migration fl ows to donor countries below a critical income threshold in the countries of origin, rendering migration policies in donor countries more restrictive.…”