Migration, credit constraints and self-employment: A simple model of occupational choice, inequality and growth
AbstractIn this note we offer a simplification of Mesnard (2001) who extended Banerjee and Newman (1993) for migration. In doing so, we obtain a simple model of occupational choice, inequality and growth, where liquidity constraints determine not only access to entrepreneurship but also access to migration. Starting from an initial underdevelopment trap, we explore the conditions under which migration prospects allow for a shift towards the efficient long-run equilibrium of the economy. This complements the empirical literature on return migration and self-employment in highlighting the mechanisms whereby, in alleviating liquidity constraints for some households, migration and remittances may have significant aggregated effects.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 15 (2002)
Issue (Month): 7 ()
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Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- F2 - International Economics - - International Factor Movements and International Business
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