From farms to borders: Agricultural distortions and international migration

International migration has surged in recent years, especially from rural areas in developing countries. This paper examines how agricultural distortions contribute to these emigration patterns and affect welfare, using Guatemala as a case study. A structural model with agricultural and non-agricultural sectors, estimated with micro and aggregated data, shows that distortions drive emigration among more productive agents and cause factor misallocation, diminishing overall productivity and incomes. Reducing distortions to the most efficient departments lowers emigration by 2.3 points and raises agricultural productivity by 30.1% and median welfare by 4.5%. High-distortion areas are more isolated and lack institutional and financial access.