Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282789 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16662
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper examines international temporary migration as an intermediary step among aspiring entrepreneurs to accumulate the needed capital when they face credit constraints at home. The analysis is based on a representative dataset of lifetime employment histories of return migrants from Bangladesh. After establishing the credit constraints that potential entrepreneurs face, the paper shows that non-agricultural self-employment rates are significantly higher among returning migrants – over half versus around 20% of non-migrants. Most migrants transition into self-employment by using their savings from abroad as the main source of financing. The paper then offers, for the first time, a detailed account of the financial costs and benefits of international migration. Our findings suggest that temporary migration can contribute to structural transformation of lower-income countries by enabling credit-constrained workers to enter into non-agricultural entrepreneurship.
Subjects: 
temporary migration
credit constraints
risky investment
entrepreneurship
JEL: 
J61
O15
Document Type: 
Working Paper

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