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Migrants' beliefs and investment

Author

Listed:
  • Marlon Seror

    (University of Bristol, Paris School of Economics, DIAL, Institut Convergences Migrations)

Abstract

Migration increases sending households' capacity to invest but introduces additional information asymmetry between household members. In this paper, I establish a new stylized fact: Migrants systematically overestimate assets that they typically invest in and that are held by their households. This is shown using novel data with matched reports from Senegalese migrants and their own households of origin. I nd empirical support for a self-selection mechanism, whereby migrants who are more optimistic about their households' trustworthiness are more likely to sort into investment, and reject alternative interpretations based on behavioral biases. This mechanism suggests important economic consequences, such as inhibited migration and underinvestment in public goods.

Suggested Citation

  • Marlon Seror, 2019. "Migrants' beliefs and investment," Working Papers DT/2019/12, DIAL (Développement, Institutions et Mondialisation).
    • Handle: RePEc:dia:wpaper:dt201912
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    More about this item

    Keywords

    Asymmetric information; International migration; Intrahousehold allocation.;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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