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



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

Mariapia Mendola

University of Milan-Bicocca and Centro Studi Luca d’Agliano
[email protected]

December 2004

Abstract

In this paper we study the interrelationship between determinants of migration, conceived as a
family strategy, and the potential impact of having a migrant household member on people
left behind. Labour migration is often related to poverty but given its lumpy-investment
nature, poverty may constitute a motivation to migrate as well as a constraint to do it. We use
cross-sectional household data from two rural regions of Bangladesh to test whether migration
is a form of income diversification strategy that significantly influences the risk-taking
behaviour of source farm households in agricultural activities. We account for heterogeneity
of migration constraints differentiating between domestic (temporary and permanent) and
international moving destinations. We find that richer and large-holder households are more
likely to participate in costly high-return migration (i.e. international migration) and employ
modern technologies, thereby achieving higher productivity. Poorer households, on the other
hand, are not able to overcome entry costs of moving abroad and fall back on migration with
low entry costs, and low returns (i.e. domestic migration), which does not help them to
achieve production enhancements and may lock them into persistent poverty. We interpret our
results as evidence that if migration is a profitable household activity, entry constraints may
hinder the access to it and its effectiveness as income diversification strategy.

Acknowledgements: I wish to thank Giorgio Barba Navaretti, Eliana La Ferrara, Alan Winters and Paolo Epifani
for helpful comments. I am also grateful for insightful discussions to participants to the 2nd PhD Conference on
Research in Economics held at University of Pavia, and to Bruno Bosco, Lucia Parisio, Alessandro Santoro,
Conchita D’Ambrosio and seminar participants at Università degli Studi di Milano-Bicocca. Usual disclaimers
apply.



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