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Coping with shocks: the impact of Self-Help Groups on migration and food security

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  • Timothée Demont

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper asks whether local savings and credit associations help poor rural households hit by climatic shocks. Combining data from an original field experiment with meteorological data, I investigate how Self-Help Groups (SHGs) allow households to cope with rainfall shocks in villages of East India over a sevenyear period. I show that SHGs withstand large rainfall shocks remarkably, and that credit flows are very stable in treated villages. As a result, treated households experience a higher food security during the lean season following a drought and increase seasonal migration to mitigate future income shocks. These results imply that small-scale financial institutions like SHGs help to finance temporary risk management strategies and to cope with important covariate income shocks such as droughts.

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  • Timothée Demont, 2020. "Coping with shocks: the impact of Self-Help Groups on migration and food security," Working Papers halshs-02571730, HAL.
  • Handle: RePEc:hal:wpaper:halshs-02571730
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02571730
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    More about this item

    Keywords

    microfinance; weather shocks; risk management; seasonal migration; food security;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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