Does migration make rural households more productive? Evidence from Mexico

The migration of labor out of rural areas and the flow of remittances from migrants torural households is an increasingly important feature of less developed countries. Thispaper explores ways in which migration influences incomes and productivity of land andhuman capital in rural households over time, using new household survey data fromMexico. Our findings suggest that a massive increase in migration to the United Statesincreased per-capita incomes via remittances and also by raising land productivity inmigrant-sending households. They do not support the pessimistic view that migrationdiscourages production in migrant-sending economies, nor the view implicit in separableagricultural household models that migration and remittances influence householdincomes but not production.