Migration, Remittances and Capital Accumulation: Evidence from Rural Mexico

Vera Chiodi, Esteban Jaimovich and Gabriel Montes-Rojas (gabriel.montes@fce.uba.ar)
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Vera Chiodi: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: This article studies the link between migration, remittances and asset 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 instead. Exploiting within family variation and an instrumental variable strategy, we show that migration indeed accelerates productive assets' accumulation. However, when we look at the effect of migration on non-productive assets (durable goods), we find 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.

Date: 2012-08
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Citations: View citations in EconPapers (39)

Published in The Journal of Development Studies, 2012, 48 (8), pp.1139-1155. ⟨10.1080/00220388.2012.688817⟩

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Related works:
Journal Article: Migration, Remittances and Capital Accumulation: Evidence from Rural Mexico (2012)
Working Paper: Migration, Remittances and Capital Accumulation: Evidence from Rural Mexico (2012)
Working Paper: Migration, Remittances and Capital Accumulation: Evidence from Rural Mexico (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-00813389

DOI: 10.1080/00220388.2012.688817

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