Foreign aid and illegal immigration

We develop a two-country model of illegal immigration. We analyse the effec t of foreign aid on illegal immigration, and consider both exogenous and en dogenous income repatriation. In the former, an increase in aid increases i llegal immigration if the total amount of aid is small. A transfer of resou rces from border control to aid increases illegal immigration when the tota l amount of aid is small. Under endogenous income repatriation, aid has no effect on illegal immigration when the preferences of the immigrants and th eir family members are the same. Lf the preferences are different, aid may increase illegal immigration. (C) 2000 Elsevier Science B.V. All rights res erved. JEL classification: O1; F35.