Does Poverty Alleviation Increase Migration? Evidence from Mexico

What is the long term effect of cash transfers (CT) on rural migration? CT programs have demonstrated to increase human capital investments of poor families by increasing nutrition, health and schooling levels. How- ever, there is little evidence on the long term effects of CT programs particularly on migration decisions. Progresa-Oportunidades, the pioneer Mexican CT program that started in 1997, would give some evidence for this open question. I examine the sudden drop in the population size and gender composition of Mexican rural villages where this program was implemented between 1998 and 2005. I use a regression discontinuity design to identify the effects of the program on villages located on the margin of the poverty distribution and close to the cutoff point of the eligibility criteria. The average population in a fully covered village decreased by 70 people in 2005 compared to 1995 (almost 10 percent of the average population of 1995). Sixty five percent of this reduction corresponds to adults who left their villages and forty percent of this reduction can be attributed to Progresa-Oportunidades. The reduction of adult population of males is 6 times higher than for females, a clear sign of a significant increase in the migration patterns of this population.