This verdant swath of southern Indian coastline is a famously good place to be poor. People in Kerala live nearly as long as Americans do, on a sliver of the income. They read at nearly the same rates.

Varkala, a coastal town in Kerala, boasts a heavy migrant community. Keralite migrants send $5 billion home a year

Plagued by chronic unemployment, more Keralites than ever work abroad, often at sun-scorched jobs in the Persian Gulf that pay about $1 (Rs40.70) an hour and keep them from their families for years. The cash flowing home now helps support nearly one Kerala resident in three. That has some local scholars rewriting the Kerala story: far from escaping capitalism, they say, this celebrated corner of the developing world is painfully dependent on it.

“Remittances from global capitalism are carrying the whole Kerala economy," said S. Irudaya Rajan, a demographer at the Centre for Development Studies, a local research group. “There would have been starvation deaths in Kerala if there had been no migration. The Kerala model is good to read about, but not practically applicable to any part of the world, including Kerala."

Kerala’s standing as the other way—the benevolent path to development, a retort to globalization—makes the travails of its 1.8 million globalizing migrants especially resonant.

Mohan’s life offers the kind of case study common here. Having risen from a poor family to finish two years of college, her husband, Ramakrishnan, 39, saw few job prospects and left for the Gulf 15 years ago. As a driver in Qatar, he now earns $375 a month, about five times the local wage, and sees his family once a year.

Ramakrishnan’s earnings have brought the family the accoutrements of middle-class life: a renovated kitchen, a new motorcycle and a parochial school education for two daughters, Blessy, 10, and Elsa, 6. But despite her husband’s daily calls, Mohan said, “I feel very alone," and the girls plead for their father’s return. “They want Papa and they also want money," she said. “They cannot have both."

To its admirers, the state’s struggles are those endemic to the developing world, while its achievements are unique. It is poor, even by India’s standards, with an annual per capita income of $675, compared with $730 nationwide. (The figure in the US is about $25,000.)

But Kerala’s life expectancy is nearly 74 years—11 years longer than the Indian average and approaching the American average of 77 years. Its literacy rate, 91%, compares with an Indian average of 65%, and an American rate the United Nations (UN) estimates at 99%.

Those enviable outcomes, its supporters stress, are a result of policy choices: Kerala spends 36% more on education than the average Indian state and 46% more on health.

“The fact that quality of life can be improved through government intervention, even in societies that are very poor—I think that’s important," said Prabhat Patnaik, the vice-chairman of the state planning board. Kerala’s experience, he said, shows “the quality of life is not just related to the growth rate" of the economy.

“Put it in the context of any other part of the developing world and its achievements still stand out as remarkable," said Richard Franke, an anthropologist at Montclair State University in New Jersey. “Children don’t die in the first year of life, boys and girls have approximately equal life chances, they get educated, and they live long lives." He added: “The Kerala model stands as a great achievement, with or without migration."

Kerala’s culture of human investment is at least two centuries old and owes debts to the missionaries and maharajahs who emphasized schools.

The state was equally well known as a font of Leftist politics. The Communist party came to power in 1957 and has ruled on and off since. The state transferred land from the rich to the poor, set a minimum wage and invested heavily in clinics and schools.

Though Kerala’s tax rates have been comparable to other states, its collection rates have been higher, and it has spent more on education and health.

It also gained a reputation as a place hostile to business, with heavy regulation, militant unions and frequent strikes. There are fishing jobs, but little industry and weak agriculture. Government is the largest employer; many people run tenuous businesses such as tea shops or tiny stores.

Talk of the Kerala model began after a 1975 UN report praised the state’s “impressive advances in health and education". Starved for success stories from the developing world, experts noticed.

Amartya Sen, a future Nobel laureate in economics, wrote widely on Kerala, arguing (in a book with Jean Dreze) that its “outstanding social achievements" were of “far-reaching significance" in other nations.

Yet, even as Kerala gained fame, large numbers of its workers were leaving. The Persian Gulf needed labour, and Keralites were used to travelling for jobs. The number of overseas workers doubled in the 1980s, and then tripled in the 1990s. In a state of 32 million where unemployment approaches 20%, one Keralite in six now works overseas.

Without migrant earnings, critics say, the state’s lustre could not be sustained. The $5 billion that Keralite migrants send home augment the state’s economic output by nearly 25%. Migrants’ families are three times as likely as those of non-migrants to live in superior housing, and about twice as likely to have telephones, refrigerators and cars. Men seeking wives place newspaper ads, describing themselves as “handsome, teetotaller, foreign-employed" or “God-fearing and working in Dubai".

At its best, migration produces stories like that of Benjamin Fernandez, 55, who moved to the UAE 30 years ago as a secretary and now owns a construction firm there.

Yet, the suicide rate in Kerala is four times the national average, and there are also families like that of Shirley Justus, 45, who struggled to raise three girls by herself while her husband drove trucks in Muscat and Dubai. Her oldest, Suji, graduated from high school last year and made two study plans, one aimed at England and the other at Mumbai. Justus, afraid to be responsible for letting her go, vetoed both ideas. Her daughter obeyed with little complaint and then hanged herself.

With nearly 25% of the money migrants send home being spent on education, some Keralites experience a painful cycle: migration buys education, which leads to more migration. Educated Keralites, more choosy about jobs, are more likely to be unemployed.

In the family of James John Pereira, literacy and migration have been intertwined for nearly 100 years, since his father left to work as a valet on a Sri Lankan plantation. His earnings put Pereira through private school, and Pereira’s 49 years abroad as a clerk did the same for his five children, all of whom earned master’s degrees. But three are now working abroad themselves, as is the husband of a fourth.

Kerala’s homegrown critics say such stories underscore the problems of a strategy that severs human development and economic growth. “Keralites are developing the Gulf economy," Professor Rajan said. “They are not developing our economy."

Professor Franke, the Kerala admirer, said the economic forces that lead people to migrate are beyond the state’s control. “But what’s unique about Kerala is that the benefits are likely to be shared in a more fair and just way," he said. “I wouldn’t say it discredits the model," Franke said of Kerala’s migration. “It shows that it has weaknesses."