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.

Migration, Remittances and Capital Accumulation: Evidence from Rural Mexico

Esteban Jaimovich;
2012-01-01

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.
2012
48
8
1139
1155
Vera Chiodi; Esteban Jaimovich; Gabriel Montes-Rojas
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/1943171
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