Consumption and Leisure: The Welfare Impact of Migration on Family Left Behind

34 Pages Posted: 31 Oct 2016 Last revised: 28 Apr 2023

See all articles by Elie Murard

Elie Murard

IZA Institute of Labor Economics; Nova School of Business and Economics

Abstract

This paper examines the effect of international migration on the welfare of family members left behind at the origin. Previous literature has produced inconclusive evidence, with some studies suggesting that migration reduces income poverty while others show that non-migrants bear a larger work burden to compensate for the loss of migrants' earnings. This paper provides a new unified framework that generates testable predictions of whether migration increases non-migrants' welfare in terms of both consumption and leisure time.Drawing on household panel data in rural Mexico, I find that migration increases non-migrants' consumption, but that this consumption gain cannot be explained by labor supply adjustments. Migration improves left-behinds' welfare through two different channels: (i) migrants' remittances exceed their forgone income contribution to the origin household; and (ii) the out-migration of a farmer increases the marginal productivity of agricultural labor for those left behind in the farm.

Keywords: migration, labor supply, welfare, remittances, consumption, Mexico

JEL Classification: O15, J22, F22

Suggested Citation

Murard, Elie, Consumption and Leisure: The Welfare Impact of Migration on Family Left Behind. IZA Discussion Paper No. 10305, Available at SSRN: https://ssrn.com/abstract=2861090 or http://dx.doi.org/10.2139/ssrn.2861090

Elie Murard (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

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