Do Cash Transfers to Farmers Reduce Migration? Procampo in Mexico

Abstract

This paper provides a theoretical model to suggest that if cash transfers for farmers have or are perceived to have conditionalities in terms of location (whereby at least some household members must remain at the place of origin to benefit from the transfers), their impact on temporary and permanent migration is uncertain a priori. To test empirically what the impact of the transfers could be, we use data on Procampo, a large transfer program for rural farmers in Mexico implemented since 1994. We find that the impact of Procampo on both permanent and temporary migration has been negative.