Does aid induce brain drain? A panel data analysis

Abstract

Recent evidence suggests that aid induces migration. This result is nevertheless not very informative from a policy perspective since what counts in terms of welfare consequences is the composition of migration. In this paper we focus on education and study which of skilled or unskilled migration is more sensitive to aid. More specifically we investigate the possible channels through which aid might affect self-selection among international emigrants and find that aid induces positive selection by easing the movement of highly qualified workers. Interestingly, we find that technical cooperation and bilateral aid have a significant influence on skilled migration but do not seem to affect unskilled migration significantly. On the other hand, aid targeted to development enhancement affects both categories but seems to have a larger effect on the former.

Outlier robust inference in the instrumental variable model with applications to causal effects

“…As a consequence, due to the outlier, there seems to be a strong relationship between and . This phenomenon is also described in Ugarte Ontiveros and Verardi (2012) and Dehon et al (2009).…”

Migration and Development

“…Up to now, the empirical research on the relationship between average education and migration has produced heterogeneous findings. Hatton and Williamson (1997) find that European countries' education levels were not significantly associated with mass emigration; in Ontiveros and Verardi (2012) there is no relationship between education and overall (modern) emigration, but there are negative links between it and skilled emigration; while in Clemens (2020) the relationship between education in the origin country and emigration is positive. One possible explanation for the heterogeneity of these results can be the two-sided role of average education, partly similar to that of income: on the one hand, higher average levels of education in the home country can facilitate emigration but, on the other hand, can also be correlated with better employment and wage opportunities at home.…”

“…One possible explanation for the heterogeneity of these results can be the two-sided role of average education, partly similar to that of income: on the one hand, higher average levels of education in the home country can facilitate emigration but, on the other hand, can also be correlated with better employment and wage opportunities at home. Moreover, as in Ontiveros and Verardi (2012), education levels at home may interact with the skill-composition of migration flows.…”