Abstract
This paper uses geographically disaggregated data to investigate the role of foreign aid as a pull factor for internal migration in Malawi over the period 1998-2008. Employing a standard gravity model of migration, we show a positive relationship between the volume of foreign assistance a district receives and the number of immigrants. While aid makes districts more attractive as migrant destinations, there is no evidence of a corresponding push factor effect on internal mobility. We also dig deeper into the mechanisms through which foreign aid can shape internal migration decisions. According to our results, the positive welfare effects of foreign assistance manifest themselves not only through a rise in economic opportunities, but also in improved access to public services in recipient districts.
Highlights
Differentials in economic opportunities and in the availability and quality of public services are typically among the main factors influencing the decision to migrate (Lucas, 2015)
Our results reveal a positive impact of foreign aid as a pull factor for internal migration in Malawi
Our findings suggest that the welfare enhancing effects of aid-supported projects make districts more appealing as internal migrant destinations, and seem to create more incentives for households to stay in their district of origin, rather than leaving
Summary
Differentials in economic opportunities and in the availability and quality of public services are typically among the main factors influencing the decision to migrate (Lucas, 2015). It is positively related to the quality of services proxied by a series of health and educational outcomes (De and Becker, 2015; Dolan, 2018) In such a context, foreign aid is likely to significantly shape the spatial differences in the provision of public services and economic opportunities. We test whether the volume of foreign assistance in recipient districts is associated to development outcomes that are likely to shape internal migration flows This links our paper to the growing and recent literature that uses geo-localized data to evaluate the impact of aid on both economic and social welfare indicators
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