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Mobile money and shock-coping: Urban migrants and rural families in Bangladesh under the COVID-19 shock

Author

Listed:
  • Egami, Hiroyuki
  • Mano, Yukichi
  • Matsumoto, Tomoya

Abstract

People in developing economies face substantial income risks and use diverse strategies to mitigate the negative welfare impact. Rural households often send migrants to diversify income sources and depend on remittances to cope with income risks. To examine the risk-coping mechanism of urban migrants and their rural families against the aggregate shock due to the COVID-19 pandemic, we analyze the seven-round Bangladeshi household panel covering the period before and after the first implementation of COVID-19 lockdown policies. Our event study finds that urban migrants experienced more substantial income loss than their rural families and reduced but not ceased remittances to cope with the aggregate shock jointly. Notably, mobile money services allowed them to continue sending remittances even under the lockdown policies.

Suggested Citation

  • Egami, Hiroyuki & Mano, Yukichi & Matsumoto, Tomoya, 2021. "Mobile money and shock-coping: Urban migrants and rural families in Bangladesh under the COVID-19 shock," Discussion paper series HIAS-E-109, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
  • Handle: RePEc:hit:hiasdp:hias-e-109
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    References listed on IDEAS

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    1. Stark, Oded, 1988. "On marriage and migration," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 23-37.
    2. McKenzie, David J., 2003. "How do Households Cope with Aggregate Shocks? Evidence from the Mexican Peso Crisis," World Development, Elsevier, vol. 31(7), pages 1179-1199, July.
    3. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    4. Rosenzweig, Mark R, 1988. "Risk, Implicit Contracts and the Family in Rural Areas of Low-income Countries," Economic Journal, Royal Economic Society, vol. 98(393), pages 1148-1170, December.
    5. Robert M. Townsend, 1995. "Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 83-102, Summer.
    6. Munyegera, Ggombe Kasim & Matsumoto, Tomoya, 2016. "Mobile Money, Remittances, and Household Welfare: Panel Evidence from Rural Uganda," World Development, Elsevier, vol. 79(C), pages 127-137.
    7. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
    8. World Bank, 2020. "COVID-19 Crisis Through a Migration Lens," World Bank Publications - Reports 33634, The World Bank Group.
    9. McKenzie, David J, 2006. "The Consumer Response to the Mexican Peso Crisis," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 139-172, October.
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    More about this item

    Keywords

    migrants; remittances; risk coping; aggregate shock; mobile money; COVID-19;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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