The Role of Attitudes toward Risk in the Decision to Migrate

Hector Conroy, University of California, Los Angeles

Geographic mobility plays a key role in the process of development in most low-income countries. This is especially true in Mexico, whose border with the U.S. has the largest flow of migrants in the contemporary world. Developing a good understanding of the socio-economic determinants of migration decisions has proved to be extremely difficult. This paper examines the role that attitudes toward risk play in the decision to migrate. It utilizes unprecedented longitudinal data on social, economic, and demographic outcomes from the Mexican Family Life Survey (MxFLS), which also includes migration histories and direct measures of people’s preferences—risk aversion among them. With these data, the paper tests directly whether people’s attitudes toward risk influence the decision to migrate and finds a (perhaps surprisingly) positive relation between financial risk aversion and willingness to migrate: The most financially risk averse seem to be the most willing to migrate.

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Presented in Session 14: Remittances and Risk in Internal Migration