Internal and external migration can have a profound impact on rural asset accumulation in most Third World countries. In many African, Asian, and Latin American countries the bulk of the labor force still lives in the countryside. In these countries the large difference between expected rural and urban or foreign incomes, coupled with the risk-reducing functions of migration, causes workers to migrate, either to urban centers or abroad. The remittances—defined as the money or goods sent home by migrant workers—can have a large effect on the accumulation of assets in these rural areas. For example, an inflow of external remittances to rural households at the upper end of the income distribution could increase land accumulation by the rich. In general terms the effect of remittances on asset accumulation in a rural Third World economy depends on answers to three questions: (a) Who migrates? (b) How much net income do migrants remit? and (c) What are the marginal effects of these remittances on household consumption and investment? Because of data limitations, in this article I propose to examine only the first and the third questions; other researchers have addressed the second issue. In the past surprisingly little attention has been focused on the question of the marginal effects of remittances on household consumption and investment in the rural Third World. This inattention has been due to three considerable methodological problems. The first is fungibility; because remittances are like any other form of cash income, it is difficult to associate this income source with any particular changes in household expenditure behavior. The second problem relates to the multiple-round effects of remittances on the local economy. For example, an inflow of remittances into a rural area may lead to a surge in expenditures in housing, which may, in turn, create new income and employment opportunities for the poor and unskilled. Unfortunately, however, few studies have