While policymakers hope to stem migration flows by giving foreign aid, existing empirical evidence points in the opposite direction: by loosening budget constraints, aid tends to encourage people to emigrate. In this paper, we revisit the aid-migration link using a substantially extended and adjusted econometric approach based on a gravity model of international migration. In contrast to the previous literature, we obtain evidence of a negative relationship between aid and emigration rates. This even holds for the poorer part of recipient countries, which suggests that the budgetary constraint channel does not play a significant role in shaping migration decisions. The most plausible explanation for these contrasting results is that, unlike in previous studies, we use migrant flows rather than migrant stocks as the dependent variable.

The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Professor Brigid Laffan, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society. The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union.

Since policymakers increasingly regard foreign aid as a means to manage international flows of migrants, it is important to obtain accurate empirical evidence on the complex link between aid and migration. Recent research has shown that the impact of foreign assistance on migrant flows is highly heterogenous across aid categories. In this paper, we focus on a dimension of heterogeneity that has so far not been considered in the literature, namely whether or not the delivery of foreign aid is associated with a transfer of resources to the recipient country. We show in a first step that non-transferred aid is quantitatively important, accounting for more than 25 percent of overall aid given by OECD DAC donors in 2016. Running separate gravity-type regressions for transferred and non-transferred aid, we then find that transferred aid has a much stronger (negative) impact on migration than the previously used total aid variable that includes the non-transferred component. As may be expected, non-transferred aid itself does not appear to affect migrant flows. A high share of non-transferred aid would therefore be at odds with donors' stated goal of tackling the root causes of migration.

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The Robert Schuman Centre for Advanced Studies (RSCAS), created in 1992 and directed by Professor Brigid Laffan, aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society. The Centre is home to a large post-doctoral programme and hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union.