Economics and Finance Faculty Publications and Presentations

Does access to credit alter migration intentions?

Document Type

Article

Publication Date

3-5-2023

Abstract

This study investigates whether access to credit affects migration intentions. Using Gallup survey data for the years 2009 and 2010 for 17 African countries, we document a negative link between the ability to borrow and the desire to migrate. Being able to borrow reduces the likelihood of reporting wanting to migrate, especially for those with some education, those with lower income, for individuals with a bank account, and for those who feel their assets are safe. To deal with endogeneity, we assume that migration desire is driven by borrowing which in turn is determined by access to financial services. Therefore, we estimate a two-equation system for migration and borrowing, using variables describing access to financial services as instruments. We verify our findings using identification through heteroscedasticity and using a geographical instrument. Our results indicate that efforts to increase credit access in developing economies can cement residents’ attachment to their home country.

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https://rdcu.be/ddmxV

Publication Title

Empirical Economics

DOI

https://doi.org/10.1007/s00181-023-02393-y

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