Migration and capital accumulation: Evidence from rural Mexico
AbstractThis paper studies the link between migration, remittances and productive assets accumulation for a panel of poor rural households in Mexico over the period 1997- 2006. In a context of financial markets imperfections, migration may act as a substitute for imperfect credit and insurance provision (through remittances from migrants) and, thus, exert a positive effect on investment. However, it may well be the case that remittances are channelled towards increasing consumption and leisure goods. Exploiting within family variation and an instrumental variable strategy, we show that migration indeed accelerates productive assets accumulation. Moreover, when we look at the effect of migration on consumption of non-productive assets (durable goods), we find instead a negative effect. Our results then suggest that poor rural families resort to migration as a way to mitigate constraints that prevent them from investing in productive assets.
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Date of creation: Oct 2009
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migration ; remittances ; capital accumulation ; rural poverty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
- NEP-MIG-2011-03-19 (Economics of Human Migration)
- NEP-PBE-2011-03-19 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marta Ruiz-Arranz & Paola Giuliano, 2005.
"Remittances, Financial Development, and Growth,"
IMF Working Papers
05/234, International Monetary Fund.
- Rapoport, Hillel & Docquier, Frederic, 2006.
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Handbook on the Economics of Giving, Reciprocity and Altruism,
- Das Gupta, Monica, 1987. "Informal Security Mechanisms and Population Retention in Rural India," Economic Development and Cultural Change, University of Chicago Press, vol. 36(1), pages 101-20, October.
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