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Insurance motives to remit: Evidence from a matched sample of Ethiopian internal migrants

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  • de Brauw, Alan
  • Mueller, Valerie
  • Woldehanna, Tassew

Abstract

Migration and remittances can be used by rural households as a means of insurance, investment, and income augmentation. Ample attention has been given to studying international remittance flows, since for many countries such transfers comprise a significant fraction of income. Remittance flows from internal migrants are relatively understudied, particularly in Africa, where remittance rates are poor. We use a unique matched migrant sample to study what drives the low remittance rates in Ethiopia. Descriptive statistics suggest remitters are positively selected in terms of wealth characteristics compared with the average tracked migrant. Limited skill transferability and liquidity largely explain low remittance rates in Ethiopia. Weaker evidence suggests migrants are additionally motivated to remit as a form of self-insurance against own shocks to income and investments towards future inheritable assets.

Suggested Citation

  • de Brauw, Alan & Mueller, Valerie & Woldehanna, Tassew, 2011. "Insurance motives to remit: Evidence from a matched sample of Ethiopian internal migrants," IFPRI discussion papers 1090, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1090
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    References listed on IDEAS

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    Cited by:

    1. Mduduzi Biyase & Fiona Tregenna, 2016. "Determinants of remittances in South Africa," SALDRU Working Papers 176, Southern Africa Labour and Development Research Unit, University of Cape Town.
    2. Alem, Yonas & Andersson, Lisa, 2015. "International Remittances and Private Inter-household Transfers: Exploring the Links," Working Papers in Economics 631, University of Gothenburg, Department of Economics.
    3. Andersson, L., 2014. "Migration, remittances and household welfare in Ethiopia," MERIT Working Papers 004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    Keywords

    Insurance; Migration; Remittances;

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