Migratory equilibria with invested remittances

ESSEC Working paper. Document de Recherche ESSEC / Centre de recherche de l'ESSEC ISSN : 1291-9616 DR 09002This paper analyzes international migrations when migrants invest part of their income in their origin country. This investment contributes to increase capital intensity and wages in the origin country, thus reducing the scope for migrating. We show that a non-total migratory equilibrium can exist if the foreign wage is not too high, and/or migratory and transfer costs are not too low. Exogenous shocks, such as an increase in the foreign wage, lead to an increase in optimal remittances per migrant, and a higher wage in the origin country. Yet the net effect on the equilibrium number of migrants is positive. Hence, in equilibrium, optimal remittances and number of migrants are positively related. We use data from twenty five countries from Eastern Europe and Central Asia in 2000 in order to test for this implication of our model. OLS and bootstrap estimates put forward a positive elasticity of the number of migrants with respect to remittances per migrant. Policy implications follow.L'article étudie la migration économique dans le cadre d'un modèle où les migrants peuvent investir une partie de leur épargne dans le pays d'origine. En particulier, un équilibre avec migration partielle est faisable. Dans ce cas, on démontre et teste empiriquement une relation positive entre nombre de migrants et le montant du transfert par migrant