Does Foreign Aid Reduce Migration? Subnational Evidence from World Bank Projects — Tobias Heidland

Sprecher

Tobias Heidland (Kiel University, Kiel Institute)

Abstract

Official Development Assistance (ODA) and other state-financed development projects are promoted as means to reduce the migratory flows from developing countries. We test whether international development projects affect migration aspirations, plans, and the onset of concrete migration preparations among individuals living in the vicinity of project sites. Combining individual-level survey data from the Gallup World Poll with geo-referenced data on World Bank project location sites covering 140 countries over the 2006-2020 period. Our empirical approach exploits variation over time within regions and region-year spells to identify the causal effects of development projects on migration aspirations. The results are twofold. In the short term, we observe a significant negative impact of aid on general migration aspirations. In the long term, however, we find that higher ODA leads to a higher incidence of migration plans and preparations for departure. These effects are marginally decreasing with project size and are particularly concentrated among the group of African and Middle Eastern recipient countries. These results challenge the conventional view that increased foreign aid will decrease the root causes of migration.

Autoren

Andreas Fuchs (Goettingen University, Kiel Institute) – Andre Groeger  (Autonomous University of Barcelona)– Tobias Heidland (Kiel University, Kiel Institute) – Lukas Wellner (Goettingen University, Heidelberg University)

Raum

Hörsaal (A-032)