IDEAS home Printed from https://ideas.repec.org/p/jet/dpaper/dpaper294.html
   My bibliography  Save this paper

Seasonal migration and micro-credit in the lean period : evidence from northwest Bangladesh

Author

Abstract

This paper investigates the relationship between access to micro-credit and temporary seasonal migration, an issue which is largely ignored in the standard rural-urban migration literature. Seasonal migration due to agricultural downturns is a common phenomenon in developing countries. Using primary data from a cross-sectional household survey from the northwest part of Bangladesh, this study quantifies the factors that influence such migration decisions. Among other results, we find that network effects play a significant role in influencing the migration decision, with the presence of kinsmen at the place of destination having considerable impact. Seasonal migration is a natural choice for individual suffering periodic hardship; however the strict weekly loan repayment rules of Micro-credit Institutes can have an adverse effect on this process, reducing the ability of borrowers to react to a shock. Our result suggests that poor individuals prefer the option of not accessing the micro-credit and opt for temporal seasonal migration during the lean period. The results have numerous potential policy implications, including the design of typical micro-credit schemes.

Suggested Citation

  • Shonchoy, Abu S., 2011. "Seasonal migration and micro-credit in the lean period : evidence from northwest Bangladesh," IDE Discussion Papers 294, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper294
    as

    Download full text from publisher

    File URL: https://ir.ide.go.jp/?action=repository_action_common_download&item_id=37879&item_no=1&attribute_id=22&file_no=1
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Randall Kuhn, 2001. "The Impact of Nuclear Family and Individual Migration on The Elderly in Rural Bangladesh A Qualitative Analysis," Working Papers DRU-2577, RAND Corporation.
    2. Jones, A., 2007. "Applied Econometrics for Health Economists: A Practical Guide," Monographs, Office of Health Economics, number 000262.
    3. Daniele Fabbri & Chiara Monfardini, 2008. "Style of practice and assortative mating: a recursive probit analysis of Caesarean section scheduling in Italy," Applied Economics, Taylor & Francis Journals, vol. 40(11), pages 1411-1423.
    4. Katz, Eliakim & Stark, Oded, 1986. "Labor Migration and Risk Aversion in Less Developed Countries," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 134-149, January.
    5. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
    6. Alan de Brauw & Tomoko Harigaya, 2007. "Seasonal Migration and Improving Living Standards in Vietnam," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 430-447.
    7. Shahidur R. Khandker, 2005. "Microfinance and Poverty: Evidence Using Panel Data from Bangladesh," The World Bank Economic Review, World Bank, vol. 19(2), pages 263-286.
    8. 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.
    9. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
    10. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    11. Ben Rogaly & Daniel Coppard & Abdur Safique & Kumar Rana & Amrita Sengupta & Jhuma Biswas, 2002. "Seasonal Migration and Welfare/Illfare in Eastern India: A Social Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 38(5), pages 89-114.
    12. Shahidur R. Khandker & M.A. Baqui Khalily & Hussain A. Samad, 2010. "Seasonal Migration to Mitigate Income Seasonality: Evidence from Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 48(8), pages 1063-1083, October.
    13. Randall Kuhn, 2001. "The Impact of Nuclear Family and Individual Migration on the Elderly in Rural Bangladesh: A Qualitative Analysis," Working Papers 01-11, RAND Corporation.
    14. Shahidur R. Khandker & Baqui Khalily & Hussain Samad, 2010. "Seasonal Migration and Mitigating Income Seasonality In Northwest Bangladesh," Working Papers 5, Institute of Microfinance (InM).
    15. Stark, Oded & Levhari, David, 1982. "On Migration and Risk in LDCs," Economic Development and Cultural Change, University of Chicago Press, vol. 31(1), pages 191-196, October.
    16. Shahidur R. Khandker & Gayatri B. Koolwal & Hussain A. Samad, . "Handbook on Impact Evaluation : Quantitative Methods and Practices," World Bank Publications, The World Bank, number 2693, September.
    17. Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 549-599.
    18. Mendola, Mariapia, 2008. "Migration and technological change in rural households: Complements or substitutes?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 150-175, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kurosaki, Takashi, 2012. "Urban Transportation Infrastructure and Poverty Reduction: Delhi Metro's Impact on the Cycle Rickshaw Rental Market," PRIMCED Discussion Paper Series 24, Institute of Economic Research, Hitotsubashi University.
    2. Michael A. Clemens & Hannah M. Postel, 2018. "Deterring Emigration with Foreign Aid: An Overview of Evidence from Low‐Income Countries," Population and Development Review, The Population Council, Inc., vol. 44(4), pages 667-693, December.
    3. Gharad Bryan & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2014. "Underinvestment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh," Econometrica, Econometric Society, vol. 82(5), pages 1671-1748, September.
    4. Michael A. Clemens & Timothy N. Ogden, 2020. "Migration and household finances: How a different framing can improve thinking about migration," Development Policy Review, Overseas Development Institute, vol. 38(1), pages 3-27, January.
    5. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.
    6. Ghebru, Hosaena & Amare, Mulubrhan & Mavrotas, George & Ogunniyi, Adebayo, 2018. "Role of land access in youth migration and youth employment decisions: Empirical evidence from rural Nigeria," NSSP working papers 58, International Food Policy Research Institute (IFPRI).
    7. Gharad Bryan & Shyamal Chowdhury & A. Mushfiq Mobarak, 2011. "Seasonal Migration and Risk Aversion," Working Papers id:4650, eSocialSciences.
    8. Shonchoy, Abu S. & Kurosaki, Takashi, 2014. "Impact of seasonality-adjusted flexible microcredit on repayment and food consumption : experimental evidence from rural Bangladesh," IDE Discussion Papers 460, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abu S. Shonchoy, 2015. "Seasonal Migration and Microcredit During Agricultural Lean Seasons: Evidence from Northwest Bangladesh," The Developing Economies, Institute of Developing Economies, vol. 53(1), pages 1-26, March.
    2. Mariapia Mendola, 2004. "Migration and Technological Change in Rural Households: Complements or Substitutes?," Development Working Papers 195, Centro Studi Luca d'Agliano, University of Milano.
    3. Mariapia MENDOLA, 2005. "Migration and technological change in rural households: complements or substitutes?," Departmental Working Papers 2005-15, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    4. Quinones, Esteban J. & Barham, Bradford L., 2018. "Endogenous Selection, Migration and Occupation Outcomes for Rural Southern Mexicans," Staff Paper Series 587, University of Wisconsin, Agricultural and Applied Economics.
    5. Mendola, Mariapia, 2008. "Migration and technological change in rural households: Complements or substitutes?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 150-175, February.
    6. Juan M. Gallego & Mariapia Mendola, 2013. "Labour Migration and Social Networks Participation in Southern Mozambique," Economica, London School of Economics and Political Science, vol. 80(320), pages 721-759, October.
    7. Thai, Pham Huu Hong, 2018. "Does household credit benefit child schooling for the poorest ethnic minorities? New evidence from a transitional economy," Children and Youth Services Review, Elsevier, vol. 89(C), pages 103-112.
    8. Eva-Maria Egger & Julie Litchfield, 2019. "Following in their footsteps: an analysis of the impact of successive migration on rural household welfare in Ghana," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-22, December.
    9. Eva-Maria Egger & Julie Litchfield, 2019. "Following in their footsteps: an analysis of the impact of successive migration on rural household welfare in Ghana," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-22, December.
    10. Anzoategui, Diego & Demirgüç-Kunt, Asli & Martínez Pería, María Soledad, 2014. "Remittances and Financial Inclusion: Evidence from El Salvador," World Development, Elsevier, vol. 54(C), pages 338-349.
    11. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 17, pages 1135-1198, Elsevier.
    12. Alan De Brauw, 2007. "Seasonal Migration and Agriculture in Vietnam," Working Papers 07-04, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    13. Kudo, Yuya, 2012. "Returns to migration : the role of educational attainment in rural Tanzania," IDE Discussion Papers 322, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    14. Samuel Bazzi, 2017. "Wealth Heterogeneity and the Income Elasticity of Migration," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 219-255, April.
    15. Raphael Nawrotzki & Fernando Riosmena & Lori Hunter, 2013. "Do Rainfall Deficits Predict U.S.-Bound Migration from Rural Mexico? Evidence from the Mexican Census," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 32(1), pages 129-158, February.
    16. Rachel Sabates-Wheeler & Ricardo Sabates & Adriana Castaldo, 2008. "Tackling Poverty-migration Linkages: Evidence from Ghana and Egypt," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 87(2), pages 307-328, June.
    17. Marta Schoch, 2020. "Essays on political economy, inequality and development," Economics PhD Theses 0120, Department of Economics, University of Sussex Business School.
    18. Guy Stecklov & Calogero Carletto & Carlo Azzarri & Benjamin Davis, 2010. "Gender and migration from Albania," Demography, Springer;Population Association of America (PAA), vol. 47(4), pages 935-961, November.
    19. Cristina Cattaneo, 2009. "International Migration, the Brain Drain and Poverty: A Cross‐country Analysis," The World Economy, Wiley Blackwell, vol. 32(8), pages 1180-1202, August.
    20. Abramitzky, Ran & Boustan, Leah Platt & Eriksson, Katherine, 2013. "Have the poor always been less likely to migrate? Evidence from inheritance practices during the age of mass migration," Journal of Development Economics, Elsevier, vol. 102(C), pages 2-14.

    More about this item

    Keywords

    Bangladesh; Microfinance; Population movement; Lean period; Seasonal migration; Micro-credit;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jet:dpaper:dpaper294. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michitaka Imamitsu (email available below). General contact details of provider: https://edirc.repec.org/data/idegvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.