Financial inclusion and international migration in low- and middle-income countries

Research has insufficiently addressed the role of financial inclusion in migration decisions. Financial inclusion empowers people and provides the means to improve their own lives. We explore this relationship using data from the 2014 and 2017 waves of the Gallup World Poll Survey, which includes the first global measure of individual-level financial inclusion. Using a series of binary-choice models with sample selection, we find that financial inclusion meaningfully affects both intentions to migrate and preparations to do so. The likelihood of migration intentions and preparations increase with having an account, access to a debit card and the ability to make internet payments and to send and receive remittances. Saving for educational purposes, the ability to take out a loan, and savings via a savings club are also critical factors in converting migration intentions to preparations. Results show heterogeneous effects across rural and urban locations. Our findings imply that financial inclusion increases respondents’ ability to finance and save for migration costs and may increase their ability to utilize social networks for migration purposes. This has potentially important policy implications for policymakers seeking to achieve the Sustainable Development Goals, specifically targets 1.4, 8.10, and 10.7.