Migration,Foreign Aid and the Welfare State |
| |
| Authors: | Panos Hatzipanayotou Michael S Michael |
| |
| Institution: | 1. Athens University of Economics and Business, 76, Patission St, Athens 10434, Greece, and CESifo (Center for Economic Studies and the Ifo Institute of Economic Research);2. University of Cyprus;3. P.O. Box 20537, Nicosia 1678, Cyprus, and CESifo |
| |
| Abstract: | Aspects related to the links between international migration, foreign aid and the welfare state are highlighted in this paper. Migration is modeled as a costly movement from an aid‐recipient developing country with low income and no welfare state, towards a rich donor, developed country with a well‐developed welfare state. Within this model, it is found, among other things, that the best response of the developed donor country is to increase aid as the co‐financing rate by the recipient country increases. When the immigration cost decreases, e.g. as a result of greater economic integration between the two countries, it is beneficial for the donor country to increase aid and the recipient country to increase the co‐financing rate. |
| |
| Keywords: | |
|
|
