Internal Migration, Remittances, and Community Development in Rural Thailand

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Abstract:

This paper evaluates how rural-urban migration and remittance flows alter the level and distribution of household assets in 22 sending communities in Nang Rong, Thailand. Principal components analysis is used to construct an index of household assets from sixteen asset indicators measured in 1994 and 2000. The index is decomposed into productive and consumer assets, which constitute two broad categories of investments, with potentially different implications for future household wealth and community development. The changes in the total, productive and consumer asset indices over 6 years are then modeled as a function of migration-remittance behavior of households in 1994, and other household and village characteristics in 1994 and 2000. Because households’ migration-remittance behavior is non-random, a propensity score matching technique is used to correct for selectivity bias, where selection is specified as a multinomial choice among three household strategies: not migrate, migrate-not remit, migrate-remit. The findings show that households’ migration and remittance choices have a significant effect on the level and nature of their subsequent investments, and this effect depends strongly on households’ initial wealth. While rich households face a decrease in productive assets due to migration of their members, poor households gain assets, and improve their relative status within their communities.

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