Migration and capital accumulation: Evidence from rural Mexico

Vera Chiodi (), Esteban Jaimovich and Gabriel Montes-Rojas ()

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Abstract: This 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.

Keywords: migration; remittances; capital accumulation; rural poverty (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-mig and nep-pbe
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00575022v1
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Migration and capital accumulation: Evidence from rural Mexico (2012)
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