Does Foreign Aid Reduce Migration? Micro-Evidence from World Bank Projects.
Presenta: Andre Groeger (UAB)
While many policymakers advocate Official Development Assistance and other state-financed development projects as tools to reduce the migratory flows from developing countries, others claim that development aid—if successful—enables potential migrants to leave their countries of origin. This article investigates how international development projects affect migration aspirations, plans, and the onset of concrete migration preparations among individuals living in the vicinity of project sites. To do so, we combine timestamped individual-level survey data from the Gallup World Poll with georeferenced data on World Bank project locations in 140 countries over the 2008-2020 period. Our empirical approach exploits variation over time within regions and region-year spells to identify the causal effects of development projects on migration intentions. The results are twofold. In the short term, we observe a significant negative impact of project announcements on migration aspirations in aid-receiving countries after the project approval date. In the longer term, higher aid disbursements lead to reduced migration aspirations in recipient areas, while we do not find effects on migration plans and preparations. The effects are stronger for concessional projects and low-income countries. Overall, the results support the view that increased foreign aid will decrease the root causes of migration.
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