Document Type
Article
Publication Date
8-1-2026
CFDP Number
d2556
CFDP Pages
36
Journal of Economic Literature (JEL) Code(s)
F22; F24; O15; Q12
Abstract
Economic development is often conceived as structural transformation and migration out of rural agriculture (Lewis, 1954; Fei & Ranis, 1964). Understanding development therefore requires us to identify how rural economies transform in response to emigration. We study how international migration reshapes domestic economic activity in origin households using a randomized visa lottery that gave Bangladeshi men job opportunities in Malaysia. Winning the lottery raises total household income through remittances, but income earned in Bangladesh declines due to contractions in nonfarm business activity. In contrast, crop income remains stable despite large reductions in agricultural input expenditures, because farming gets delegated through land rental markets. We identify a “supervision constraint” that explains why households divest from nonfarm business activity. The key input that is lost through male migration is not land, labor, or physical capital, but “management capacity”.
Recommended Citation
Hossain, Marup and Mobarak, Ahmed Mushfiq, "When Does Emigration Reduce Domestic Economic Activities? Evidence on the Loss of Management Capacity from a Visa Lottery" (2026). Cowles Foundation Discussion Papers. 2984.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2984