International Handbook on Migration and Economic Development
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International Handbook on Migration and Economic Development

Edited by Robert E.B. Lucas

This Handbook summarizes the state of thinking and presents new evidence on various links between international migration and economic development, with particular reference to lower-income countries. The connections between trade, aid and migration are critically examined through global case studies.
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Chapter 4: International migration, trade and aid: a survey

Christopher R. Parsons and L. Alan Winters


In this chapter we survey the voluminous literature on migration affecting trade and the somewhat less developed literature linking aid flows to migration. We aim to guide the reader through the two literatures, highlighting key contributions and identifying important lines of enquiry. Simmering below the surface of both literatures is the issue of causation. Given the macroeconomic nature of the global flows under examination and the numerous direct and indirect links that potentially exist between them, establishing causality proves particularly problematic and is thus an issue that we pay close attention to throughout. The evidence from the trade and migration literature, in which causality has been more concretely established, suggests an almost ubiquitous positive effect of migration on trade, although exceptions exist; this suggests that richer data might be required to delve even deeper into the trade-migration nexus. While policymakers often wish that aid reduced migration, the literature suggests the opposite - namely that aid increases emigration. The mechanism has yet to be resolutely established in this literature, however, which suggests a need for future research.

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