Does foreign aid volatility increase international migration?
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Does foreign aid volatility increase international migration? Jonas Gamso 1
& Jikuo
Lu 2 & Farhod Yuldashev 2
Accepted: 23 September 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Scholars have long debated the relationship between foreign aid and international migration, with some arguing that foreign aid can deter emigrants and others contending that aid enables them. We contribute to this discussion by exploring whether negative aid shocks affect migration patterns. We theorize that these shocks, which occur when there are large and abrupt decreases in aid disbursement to a given country, lead individuals in aid-recipient countries to emigrate. Such shocks lead to reductions in the provision of public and community services that are funded by aid. These reductions in turn force individuals who depend on these services to seek better lives abroad. We expect this effect to be especially evident among low-skilled individuals, who are most reliant on the services that are supported by foreign aid. We use country-level panel data to test hypotheses derived from these arguments and we find, first, that negative aid shocks are accompanied by heightened emigration rates and, second, that this effect is driven by the emigration of relatively unskilled individuals. Keywords Foreign aid . Migration . Negative aid shocks . Push factors . Education and
emigration
1 Introduction Does foreign aid increase or decrease international migration? This topic has received considerable attention recently, as immigration has risen to the forefront of policy Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11558-02009400-2) contains supplementary material, which is available to authorized users.
* Jonas Gamso [email protected] Jikuo Lu [email protected] Farhod Yuldashev [email protected] Extended author information available on the last page of the article
Gamso J. et al.
debates and electoral politics in the United States and the countries of Western Europe (Schain 2018). While using aid to deter migration is appealing as a developmentfriendly policy approach, scholars disagree as to whether aid actually prevents migration. Some argue that aid will dissuade individuals from exiting their countries of residence by alleviating poverty (Böhning 1994) and improving political conditions (Gamso and Yuldashev 2018a), while others contend that aid encourages emigration by providing individuals with resources to move abroad (de Haas 2007; Clemens 2014). One dimension of the aid-migration nexus that has not yet been explored is aid volatility. This is critical, as evidence suggests that aid flows are volatile, owing partly to donor countries’ politics of budgeting and aid conditionality (Bulíř and Hamann 2008). Aid shocks can undermine macroeconomic management (Hudson 2015), hinder economic growth (Hudson and Mosley 2008; Neanidis and Varvarigos 2009), exacerbate corruption (Kangoye 2013), and spur armed conflict (Nielsen et al. 2011; Gutti
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