Prior research on Mexican migration has shown that social networks and economic incentives play an important role in determining migration outcomes. This study utilizes experimental data on PROGRESA, Mexico's primary poverty reduction program, to evaluate the effects of public cash transfers on migration. Our study complements a growing body of literature aimed at overcoming longstanding hurdles towards the establishment of causal validity in empirical studies of migration. We find that public cash transfers reduce US migration but have little effect on domestic migration. Furthermore, we find that the provision of cash transfers appears to reduce migration partly by reducing the relative deprivation levels of poor households. Finally, we find that the effect of public cash transfers on US migration depend on the size of existing US migration networks. Surprisingly, we see that transfers have larger (more negative) effects on US migration in communities with large existing networks. The results suggest that public transfers may be helpful in managing rural out-migration, particularly to the US. Interestingly, such programs may be most effective if they are targeted towards communities with strong existing migration patterns.
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Paper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number
03-16.
Length: 45 pages Date of creation: 2003 Date of revision: Handle: RePEc:fao:wpaper:0316
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Find related papers by JEL classification: I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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