Migration from Mexico to the United States constitutes one of the worldís largest labor áows and generates enormous capital áows in the opposite direction. Corresponding to each of these áows is a distinct view of the role migration plays in local economic development. The optimistic view stresses the role of remittances in stimulating demand and relaxing credit constraints, while the pessimistic view emphasizes the departure of the economyís skilled and motivated workers. Using data from the Mexican Migration Project and exploiting stickiness in migrantsí choice of U.S. destination, I examine the e§ects of migrant demand shocks on business ownership and job choice in Mexican communities. I Önd little evidence to support the pessimistic scenario. All members of the community, including non-migrants, appear to beneÖt from improved labor market and business investment opportunities when high U.S. demand induces migrants to leave. Demand for local products rather than credit supply e§ects seems to be responsible for this outcome.