Does access to credit alter migration intentions?

Marina-Selini Katsaiti () and Maroula Khraiche ()
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Maroula Khraiche: Robert C. Vackar College of Business and Entrepreneurship, University of Texas Rio Grande Valley

Empirical Economics, 2023, vol. 65, issue 4, No 11, 1823-1854

Abstract: 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.

Keywords: Migration; Credit access; Migration costs; Survey data; Brain drain (search for similar items in EconPapers)
JEL-codes: F22 G51 J61 O15 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00181-023-02393-y

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