Migrants' beliefs and investment

Marlon Seror

No DT/2019/12, Working Papers from DIAL (Développement, Institutions et Mondialisation)

Abstract: Migration increases sending households' capacity to invest but introduces additional information asymmetry between household members. In this paper, I establish a new stylized fact: Migrants systematically overestimate assets that they typically invest in and that are held by their households. This is shown using novel data with matched reports from Senegalese migrants and their own households of origin. I nd empirical support for a self-selection mechanism, whereby migrants who are more optimistic about their households' trustworthiness are more likely to sort into investment, and reject alternative interpretations based on behavioral biases. This mechanism suggests important economic consequences, such as inhibited migration and underinvestment in public goods.

Keywords: Asymmetric information; International migration; Intrahousehold allocation. (search for similar items in EconPapers)
JEL-codes: D13 D82 D83 O15 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2019-09
New Economics Papers: this item is included in nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:dia:wpaper:dt201912

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