Migration and capital accumulation: Evidence from rural Mexico

This paper studies the link between migration, remittances and productive assets 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. Exploiting within family variation and an instrumental variable strategy, we show that migration indeed accelerates productive assets accumulation. Moreover, when we look at the effect of migration on consumption of non-productive assets (durable goods), we find instead 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.Cet article analyse la relation entre migration et accumulation d'actifs sur des données de panel concernant des ménages ruraux au Mexique entre 1997 et 2006. Dans un contexte d'imperfection de marché, la migration peut constituer un substitut et avoir un effet positif sur l'investissement. Nous montrons que la migration encourage l'accumulation d'actifs productifs, au détriment d'actifs non-productifs. Nous illustrons nos résultats avec un modèle à deux périodes qui repose sur les décisions d'investissement et de migration pour des ménages en milieu rural avec des contraintes de crédit