Association for Public Policy Analysis & Management

This paper investigates whether social policies affect migration propensity. I exploit the random expansion of a publicly provided health care programme in Mexico, as well as the panel dimension and the timing of the Mexican Family Life Survey to control for endogenous migration. Difference-in-differences estimations reveal that non-contributory health care increases internal migration by freeing up care (time) constraints and strengthening household economic resilience in the face of health-related shocks. However, the alleviation of financial and time constraints is not significant enough to alter international migration, more costly by nature. Results point to the relevance of including both resident and non-resident household members in assessing the effects of social policies on labour market behaviours. They suggest that, in the setting studied, publicly provided health care complements, rather than substitutes, informal livelihood strategies in that relaxing binding financial and time constraints enables labour force detachment of working-age members in affiliated households.