Migration and Technological Change in Rural Households: Complements or Substitutes?



5.1 The determinants of different typologies of migration

In the former section we saw that three existent types of migration, i.e. (domestic) temporary
migration, (domestic) permanent migration, and international (permanent) migration, generate
very different net-returns at household level.

Thus, why do people decide to migrate in general, and why do they do it for a low vs high
remunerative migration type? Our hypothesis is that, in a context of missing or rationed credit
and insurance markets, household characteristics and migration entry costs shape the expected
future return differentials and the decision to participate in a specific type of migration.

Following the NELM theoretical framework, our unit of analysis is the household as a whole
(including migrant members); this is to say that the spectrum of factors influencing the
decision to migrate involves family characteristics and their endowment of human, physical
and social capital.

In the first place, we estimate a logit model for the migration decision overall, that is the
probability of having a migrant member in the household
i as a function of a set of household
characteristics (plus a regional dummy)
Xi. Thus, the dependent variable is defined as follows:
M
i = 0, if household does not have any migrant member

Mi = 1, if household has at least one member migrated for work.

The logit migration model can be expressed as:
where
β coefficients are the effect of a marginal change in Xi on the log odds ratio of
migration occurring, that is:

P= Prob(Mi = 1) =


eχp(Xiβ)

1+exp(Xi'β)


i=1,...n


. P P ^

log 11 P J = Xiβ

The observable factors Xi determining the participation to the migration process are:
household demographic characteristics (that are also tied with family labour endowment),
human capital-related attributes (including experience and schooling), cultural and social ties
(e.g. religion, family network), economic and institutional environment (e.g. region of living)
and the wealth position of the household. With respect to the latter, we included three capital-
related variables, i.e. landholdings, cattle owned25 and agricultural capital (i.e farm equipment
and owned tubewell for irrigation), in order to control for differences in physical capital
across households. Yet, it is worth stressing the differences between assets, in particular the
illiquid and liquid nature of land and cattle endowments. Land is the main inheritable form of

25 Both variables are included per adult equivalent (pae).

17



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