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



permanently or abroad. At higher level of household wealth, though, asset ownership stops
being a constraint and becomes a pushing factor to outflows overseas only; this captures the
effects of high entry costs to international moving and household liquidity constraints in
non-
linearly
shaping migration behaviour. Indeed, higher asset holdings release household
constraints to move abroad and favour high-return international migration.

These findings seem to challenge both conventional arguments that absolute poverty raises
out-migration or that better-off households stay put. On the other hand, they highlight the
importance of entry migration constraints, which act as pushing or restrain factors differently
across household wealth distribution.

Furthermore, not all migration destinations may play the same role in mitigating household
credit or risk constraints at origin. We estimated the economic impact of having a migrant
member - either temporary, permanent or international - on the propensity to adopt new high-
productivity farming technologies, such as modern seeds of rice, in source rural households.
We found that international migration has a positive effect on the investment in a superior
agricultural technology, whilst temporary and permanent migrations do not encourage such a
risky agricultural investment. The estimation strategy we used is a simultaneous equations
model, in order to take into account both the endogenous migration choice and the cross-
correlation of household decisions with respect to its (human and physical) resources
allocation.

We interpret our results as evidence that if migration is a profitable alternative household
activity, entry constraints may limit the access to it and its usefulness as income
diversification strategy. Lack of resources to bear the costs of migration faced by poor
households may generate a poverty trap whereby only better-off households have access to
the most ‘profitable’ type of migration and are able to exploit a virtuosos circle of
complementarities between overseas economic opportunities and productive activities at
origin. This intends to question the idea that migration is a straightforward strategy to escape
poverty, and to emphasise the potential role of a better distribution of resources and
information in ‘connecting’ poor people to development-enhancing processes at a global
level.

35



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