Identifier
1130
Document Type
Discussion Paper
Date of Paper
8-2026
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”.
Acknowledgements
We thank conference participants at the Bristol Applied Economics meetings on migration, Toman Barsbai, Kevin Donovan, Conner Mullally, and Mark Rosenzweig for helpful advice. We thank the World Bank, Iffath Sharif, and Maheshwor Shrestha for their partnership in data collection.
Recommended Citation
Marup Hossain and Ahmed Mushfiq Mobarak. 2026. "When Does Emigration Reduce Domestic Economic Activities? Evidence on the Loss of Management Capacity from a Visa Lottery" EGC DIscussion Paper 1130.