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Does access to credit alter migration intentions?

Author

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  • Marina-Selini Katsaiti

    (Agricultural University of Athens
    College of Business and Economics, United Arab Emirates University
    Hellenic Open University)

  • Maroula Khraiche

    (Robert C. Vackar College of Business and Entrepreneurship, University of Texas Rio Grande Valley)

Abstract

This study investigates whether access to credit affects migration intentions. Using Gallup survey data for the years 2009 and 2010 for 17 African countries, we document a negative link between the ability to borrow and the desire to migrate. Being able to borrow reduces the likelihood of reporting wanting to migrate, especially for those with some education, those with lower income, for individuals with a bank account, and for those who feel their assets are safe. To deal with endogeneity, we assume that migration desire is driven by borrowing which in turn is determined by access to financial services. Therefore, we estimate a two-equation system for migration and borrowing, using variables describing access to financial services as instruments. We verify our findings using identification through heteroscedasticity and using a geographical instrument. Our results indicate that efforts to increase credit access in developing economies can cement residents’ attachment to their home country.

Suggested Citation

  • Marina-Selini Katsaiti & Maroula Khraiche, 2023. "Does access to credit alter migration intentions?," Empirical Economics, Springer, vol. 65(4), pages 1823-1854, October.
    • Handle: RePEc:spr:empeco:v:65:y:2023:i:4:d:10.1007_s00181-023-02393-y
    DOI: 10.1007/s00181-023-02393-y
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    More about this item

    Keywords

    Migration; Credit access; Migration costs; Survey data; Brain drain;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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