Can regional policies shape migration flows?

Abstract

Our empirical analysis focuses on the effect of regional policies on migration attraction factors in Europe. We employ a regression discontinuity design to assess the causal relationship between the reception of large amounts of public funds and migration flows in the EU-15 regions. In highly-subsidised regions, we find a large increase in the share of foreign citizens from less-developed countries when compared to low-subsidised regions with similar pre-treatment characteristics. The analysis shows that such an increase is due to the positive impact of the European regional policy on job market opportunities as well as the improvement of public goods supply.