Bryan, Gharad 
ORCID: 0009-0000-2449-930X, Chowdhury, Shyamal and Mushfiq Mobarak, Ahmed
(2012)
Seasonal migration and risk aversion.
CEPR Discussion Paper.
Centre for Economic Policy Research (Great Britain), London, UK.
Abstract
Pre-harvest lean seasons are widespread in the agrarian areas of Asia and Sub-Saharan Africa. Every year, these seasonal famines force millions of people to succumb to poverty and hunger. We randomly assign an $8.50 incentive to households in Bangladesh to out-migrate during the lean season, and document a set of striking facts. The incentive induces 22% of households to send a seasonal migrant, consumption at the origin increases by 30% (550-700 calories per person per day) for the family members of induced migrants, and follow-up data show that treated households continue to re-migrate at a higher rate after the incentive is removed. The migration rate is 10 percentage points higher in treatment areas a year later, and three years later it is still 8 percentage points higher. These facts can be explained by a model with three key elements: (a) experimenting with the new activity is risky, given uncertain prospects at the destination, (b) overcoming the risk requires individual-specific learning (e.g. resolving the uncertainty about matching to an employer), and (c) some migrants are close to subsistence and the risk of failure is very costly. We test a model with these features by examining heterogeneity in take-up and re-migration, and by conducting a new experiment with a migration insurance treatment. We document several pieces of evidence consistent with the model.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Official URL: | http://www.cepr.org/ |
| Additional Information: | © 2012 The Authors |
| Divisions: | Economics |
| Subjects: | H Social Sciences > HB Economic Theory |
| JEL classification: | J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers O - Economic Development, Technological Change, and Growth > O1 - Economic Development O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources; Human Development; Income Distribution; Migration R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population |
| Date Deposited: | 11 Nov 2013 14:18 |
| Last Modified: | 11 Dec 2024 19:07 |
| URI: | http://eprints.lse.ac.uk/id/eprint/46778 |
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