Aid Programs' Unintended Effects: The Case of Progresa and Migration

42 Pages Posted: 9 Dec 2005

See all articles by Manuela Angelucci

Manuela Angelucci

University of Arizona - Department of Economics; University of Michigan - Department of Economics; Institute for the Study of Labor (IZA)

Date Written: July 2005

Abstract

This paper analyzes the effect of aid on international and domestic migration and explores the causal effect of income on migration. The theoretical model predicts that the effect of aid on migration is ambiguous, depending on both the size and type of transfers. For some household types, e.g., those that are credit constrained, conditional transfers, where the potential recipient has to comply with some requirement in order to qualify for eligibility, may decrease contemporaneous migration but increase future migration. In contrast, unconditional grants may increase the level of migration at all times. Randomized data from a Mexican development program, Progresa, are used to test these hypotheses. The empirical analysis verifies that unconditional transfers increase current migration, while conditional transfers reduce it. Overall, the program generates an increase in international migration but no change in domestic migration.

Suggested Citation

Angelucci, Manuela and Angelucci, Manuela, Aid Programs' Unintended Effects: The Case of Progresa and Migration (July 2005). Available at SSRN: https://ssrn.com/abstract=868646 or http://dx.doi.org/10.2139/ssrn.868646

Manuela Angelucci (Contact Author)

University of Arizona - Department of Economics ( email )

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Tucson, AZ 85721-0108
United States

University of Michigan - Department of Economics ( email )

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Ann Arbor, MI 48109-1220
United States

Institute for the Study of Labor (IZA)

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

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