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Migration and Financial Constraints: Evidence from Mexico

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  • Angelucci, Manuela

    () (University of Texas at Austin)

Abstract

Using data collected for the evaluation of the rural component of Oportunidades, Mexico's flagship anti-poverty program, I show that poor households' entitlement to an exogenous, temporary but guaranteed income stream increases US migration even if this income is mainly consumed and that some households likely use the entitlement to this income stream as collateral to finance the migration. The individuals who start migrating because of this income shock belong to households with no counterfactual US migrants, come from the middle of the local predicted wage distribution, and worsen migrant skills. These results suggest that financial constraints to international migration are binding for poor Mexicans, some of whom would like to migrate but cannot afford to. If generalizable, they indicate that, as growth and anti-poverty and micro-finance programs relax financial constraints for the poor, Mexican migration to the US will increase and higher levels of border enforcement will likely be needed.

Suggested Citation

  • Angelucci, Manuela, 2013. "Migration and Financial Constraints: Evidence from Mexico," IZA Discussion Papers 7726, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7726
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    Cited by:

    1. Emmanuelle Auriol & Alice Mesnard, 2016. "Sale of Visas: a Smuggler's Final Song?," Economica, London School of Economics and Political Science, vol. 83(332), pages 646-678, October.
    2. Clemens, Michael A. & Postel, Hannah M., 2017. "Deterring Emigration with Foreign Aid: An Overview of Evidence from Low-Income Countries," IZA Policy Papers 136, Institute for the Study of Labor (IZA).
    3. Chort, Isabelle & de la Rupelle, Maëlys, 2017. "Managing the Impact of Climate Change on Migration: Evidence from Mexico," GLO Discussion Paper Series 78, Global Labor Organization (GLO).
    4. Alain de Janvry & Kyle Emerick & Marco Gonzalez-Navarro & Elisabeth Sadoulet, 2015. "Delinking Land Rights from Land Use: Certification and Migration in Mexico," American Economic Review, American Economic Association, vol. 105(10), pages 3125-3149, October.
    5. Guriev, Sergei & Vakulenko, Elena, 2015. "Breaking out of poverty traps: Internal migration and interregional convergence in Russia," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 633-649.
    6. Arunachalam, Raj & Shenoy, Ajay, 2017. "Poverty traps, convergence, and the dynamics of household income," Journal of Development Economics, Elsevier, vol. 126(C), pages 215-230.
    7. Mahé, Clotilde, 2017. "Does publicly provided health care affect migration? Evidence from Mexico," MERIT Working Papers 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Kleemans, Marieke, 2015. "Migration Choice under Risk and Liquidity Constraints," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 200702, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    9. ABEBE, Girum & TEKLE, Biruk & MANO, Yukichi, 2015. "Changing saving and investment behavior: the impact of financial literacy training and reminders on micro-businesses," Discussion paper series HIAS-E-15, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    10. repec:spr:italej:v:3:y:2017:i:2:d:10.1007_s40797-017-0051-5 is not listed on IDEAS
    11. Djajic, Slobodan & Kirdar, Murat G. & Vinogradova, Alexandra, 2016. "Source-country earnings and emigration," Journal of International Economics, Elsevier, vol. 99(C), pages 46-67.
    12. Angelucci, Manuela & De Giorgi, Giacomo & Rasul, Imran, 2017. "consumption and investment in resource pooling family networks," CEPR Discussion Papers 11889, C.E.P.R. Discussion Papers.
    13. repec:bla:reviec:v:25:y:2017:i:5:p:1017-1045 is not listed on IDEAS
    14. Imbert, Clément & Papp, John, 2018. "Costs and Benefits of Seasonal Migration : Evidence from India," The Warwick Economics Research Paper Series (TWERPS) 1161, University of Warwick, Department of Economics.
    15. Gabriel Lyrio de Oliveira & André Luis Squarize Chagas, 2017. "Effects of a Cash Transfer Program on Origin-Destination Migration Flows," Working Papers, Department of Economics 2017_28, University of São Paulo (FEA-USP).
    16. Samuel Bazzi, 2017. "Wealth Heterogeneity and the Income Elasticity of Migration," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 219-255, April.

    More about this item

    Keywords

    financial constraints; Mexico; migration;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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