Migrants' beliefs and investment
2019
Migration increases sending households' capacity to invest but introduces additional information asymmetry between household members. In this paper, I establish a new stylized fact: Migrants systematically overestimate assets that they typically invest in and that are held by their households. This is shown using novel data with matched reports from Senegalese migrants and their own households of origin. I nd empirical support for a self-selection mechanism, whereby migrants who are more optimistic about their households' trustworthiness are more likely to sort into investment, and reject alternative interpretations based on behavioral biases. This mechanism suggests important economic consequences, such as inhibited migration and underinvestment in public goods.
Keywords:
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
0
References
0
Citations
NaN
KQI