A recent study found empirical evidence that the initial relative deprivation of households in their village reference group plays a significant role in migration from Mexico to the US. Controlling for initial absolute income and the expected income gains from migration, the propensity of households to participate in international migration was directly related to the households' initial relative deprivation. In this paper we expand this earlier work by addressing the role of absolute income versus relative deprivation incentives for internal and international migration in LDC households, taking into account continuities across some labour markets and discontinuities across others. The rationale for the analysis is threefold. First, there are reasons to expect that the role of relative deprivation will differ between international migration and migration within a country, as we explain below. Second, sharp discontinuities in the returns to human capital between home- and host-country labour markets may affect the ability of households that differ in their human capital endowments to achieve income position gains through international migration. Third, a relative deprivation approach to migration has important implications for development policy. In section I of the paper we outline the relative deprivation model of migration and present an illustration of the divergent policy implications of a relative deprivation model versus an absolute income model. In section II a migration decision model is estimated and is used to explore absolute and relative income motives for internal and international migration in a sample of rural Mexican households, as well as to test the extent to which discontinuity in labour markets shapes the choice of migrant destination. In section III we present our conclusions. -from Authors
