Growth With Endogenous Migration Hump And The Multiple, Dynamically Interacting Effects Of Aid In Poor Developing Countries

The authors show empirically that aid given to poor developing countries enhances growth and reduces emigration once several dynamically interacting effects of aid are taken into account in a system of equations. They estimate equations for net immigration flows as a share of the labour force and GDP per capita growth and also for all their regressors including remittances and official development aid. They use dynamic panel data methods for a sample of poor countries with GDP per capita below $1200 (2000) for which aid is about 9.5% of GDP. The partial effects in these regressions are as follows. Remittances enhance net immigration, savings, public expenditure on education and growth, but reduce tax revenues, all as a share of GDP.