Topic 20

Remittances and Rural-Urban Transformations

While internal and international migration tends to be part and parcel of broader processes of urbanisation and rural development, remittance inflows to migrant sending localities and regions tend to accelerate and transform these same processes. First, remittance inflows tend to increase the share of non-agrarian income among migrant and nonmigrant households. Second, migrants often prefer to invest remittances in nearby urban centres, thereby reinforcing existing tendencies of urbanisation. Third, return migrants often prefer to re-settle in urban centres with their families while remittances can also finance rural-urban migration of family members for work or study. Finally, the aggregate positive effects of remittances on income and employment growth in migrant sending regions have transformed some regions into relatively prosperous areas.

For instance, de Haas (2007) found that in Morocco an increasing share of return migrants prefer resettling and investing in urban centres within migrant sending regions (rather than capital cities), due to the presence of public amenities, schooling, employment opportunities and the greater potential for investment. Through urban-based real estate and business investments, remittances receiving households simultaneously capitalize on, and actively contribute to, the accelerated urban growth and concentration of economic activities in migrant boomtowns, which have become destinations for internal migrants.

Remittances also tend to contribute to accelerating rural transformations, albeit in very heterogeneous ways. Whereas under favourable agro-ecological conditions, remittances have enabled migrants to modernise agriculture and invest in land and cattle, in other cases remittances have led migrant households to de-intensify or wholly abandon agriculture. Taylor et al (2006) found that in rural Guatemala remittances have permitted the conversion of rainforest into cattle pasture and also resulted in the accumulation of land in the hands of migrants. Jones (2009), in a study of rural central Mexico, finds that remittances have enabled rural migrant households to improve their position relative to non-migrant households and relative to urban households—regarding income, possessions, and a variety of investments including agriculture  and family businesses. Nevertheless, viewed over time (1988-2002), their villages are declining in both population and investment, such that remittance-based improvements in a diminishing number of households ring rather hollow. It is precisely the unfavorable conditions for agriculture, coupled with the exogenous factor of U.S. border militarization that hinders return migration, that have curtailed investment and transformed some villages into ghost towns. Nearby towns and county seats have absorbed some of the out-migration from these villages.

In a study of migration and agricultural change in an Ecuadorian sending region, Jokisch (2002) found that remittances have neither led to agricultural abandonment nor to agricultural improvements. However, large investment in housing converted much of the region into a peri-urban landscape of cultivated real estate. In some Moroccan rural regions, remittances have enabled investments in modern irrigated agriculture, whereas they have triggered abandonment in other regions (de Haas 2007). The same evidence from Morocco also suggests that agricultural production may decline in the short term as a result of the lost labour effect, whereas in the long term effects may be positive after agricultural systems have readjusted and migrants start to invest. This seems to be corroborated by a study of the effects of temporary labour migration from five African countries to South Africa’s mines on agricultural production in countries of origin, in which Lucas (1987) finds that migration diminishes domestic crop production in the short run, but enhances crop productivity and cattle accumulation through invested remittances and increased domestic plantation wages in the long run. These findings demonstrate that the impact of migration and remittances should not been seen through a short-run lense, but should instead be studied with a longitudinal perspective.

There is a great need for research on interactions between international and internal migration, including the role of remittances in possibly facilitating a shift from rural to urban sectors. In fact, a lack of longitudinal data on migration and urban-rural transformations has hindered research in this area to date, and this seems to be a priority area for future research.


Topic 20 – Articles

de Haas, Hein. 2007. The Impact of International Migration on Social and Economic Development in Moroccan Sending Regions: A Review of the Empirical Literature.” In IMI Working Paper 3. Oxford, United Kingdom: International Migration Institute, University of Oxford.

This paper reviews the impact of international migration on socio-economic development in sending regions. Migration and remittances have considerably improved living conditions, income, education and spurred economic activity through agricultural, real estate and business investment, from which non-migrants indirectly profit. This has transformed migrant-sending regions such as the Rif, Sous and southern oases into relatively prosperous areas that now attract internal ‘reverse’ migrants. Although this challenges prevailing pessimism, the developmental potential of migration is not fully realized due to several structural constraints. Migration impacts are heterogeneous across space, socio-ethnic and gender groups, and tend to change over time and household migration cycles. Depending on the specific development and investment context, migration and remittances may enable people to retreat from, as much as to invest in, local economic activities. Paradoxically, development in migrant-sending regions seems to be a prerequisite for return and investment rather than a consequence of migration.

Jokisch, Brad D. 2002. Migration and Agricultural Change: The Case of Smallholder Agriculture in Highland Ecuador. Human Ecology 30:523–50. (Publisher Link)

This paper examines the effects of international migration from two regions of Canar Province in Ecuador to metropolitan New York on agricultural production and land-use. Thousands of farmers from the highland provinces of Canar and Azuay, Ecuador, have immigrated to metropolitan New York, where they work in menial jobs and remit, as a group, millions of dollars annually. A small agricultural survey was administered in two communities to determine land-use and agricultural production of migrant and nonmigrant households. The results suggest that migration has neither led to agricultural abandonment nor have remittances been dedicated to agricultural improvements – refuting the two opposite hypotheses that predominate in the literature. Agriculture was not significantly affected by the large labor loss and the significant inflow of remittances. Semisubsistence agriculture remains an important riskaverse economic and cultural activity, but cultivation is a poor investment. A large investment in housing and land has converted much of the region into a peri-urban landscape of cultivated real estate.

Jones, Richard C.  2009. Migration Permanence and Village Decline in Zacatecas: ‘When You Can’t Go Home Again’, The Professional Geographer 61(3):382-399. (Publisher Link)

This study is based on a survey of a stratified random sample of 301 households in Villanueva municipio (county), Zacatecas, in 1988, and 233 households in the same towns in 2002, employing the same questions and methodology. The results suggest that restrictive U.S. border policies in the intervening years, promoting both fewer initial migrants and more long-term stayers, have had a negative impact on village economies in the municipio. Although in both periods migrant families (those with at least one member working overseas at some point) held a distinctive edge on nonmigrant families in terms of possessions and productive investments, there was a decline in levels of investment and remittances in the municipio between 1988 and 2002. In the latter year, Villanueva had more nonmigrant families as well as more families with permanent migrants—both trends leading to less money remitted to rural families and lower agricultural investments. Observations and interviews with migrants and townspeople in the municipio in 2005 and 2008 strongly corroborate these trends. Rural villages are facing depopulation as migrant families settle for good in the United States while non-migrant families gravitate towards the county seat or nearby cities.

Lucas, Robert E.B. 1987. Emigration to South-Africa’s Mines. American Economic Review 77 (3):313–330.

This article examines temporary labor migration from five countries to South Africa’s mines. The author extends the analysis of labor withdrawal from agriculture to embrace long-term effects. What has been neglected is the possibility that earnings of migrants may serve as a source of capital accumulation in the rural areas. Emigration (a) diminishes domestic crop production in the short run; (b) enhances crop productivity and cattle accumulation through invested remittances in the long run; (c) increases domestic plantation wages. In both Malawi and Mozambique, emigration to South Africa’s mines significantly inflated labor costs to the local estate and plantation operators. This points to the conflicting interests between employers in the sending countries and in the mines.

Taylor, Matthew J., Michelle J. Moran-Taylor, and Debra R. Ruiz. 2006. Land, Ethnic, and Gender Change: Transnational Migration and Its Effects on Guatemalan Lives and Landscapes. Geoforum 37 (1):41–61.

Based on extensive ethnographic fieldwork, this article analyses how migrants and their remittances effect gender relations, ethnicity, land use, and land distribution. Evidence is drawn from research in four communities. San Pedro Pinula and Gualan are communities of eastern Guatemala. San Cristobal Totonicapan is an indigenous town in Guatemala’s western highlands, and San Lucas is a lowland frontier community in the Guatemalan department of Ixcan, which borders Chiapas, Mexico. The results suggest that migrants and their financial and social remittances result in significant changes in land use and land distribution in Ixcan. Migrant money permits the conversion of rainforest into cattle pasture and also results in the accumulation of land in the hands of migrants. In terms of land use, we see in San Pedro Pinula that migrant money also allows the Pokoman Maya to make small entries into the Ladino (non-indigenous) dominated cattle business. In San Pedro Pinula, the migration and return of Maya residents also permits them to slowly challenge ethnic roles. Also in Gualan and San Cristobal migration and social remittances permit a gradual challenge and erosion of traditional gender roles. However, migration-related changes in traditional gender and ethnic roles is only gradual because migrants, despite their increased earnings and awareness, are confronted with a social structure that resists rapid change. Despite the advantages that migration brings to many families, especially in the face of a faltering national economy and state inactivity regarding national development, the analysis suggests that migration and remittances have not resulted in community or nation-wide development.