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Migration and Consumption Insurance in Bangladesh

Author

Listed:
  • Melanie Morten

    (Stanford University)

  • Corina Mommaerts

    (Yale University)

  • Ahmed Mobarak

    (Yale University)

  • Costas Meghir

    (Yale University)

Abstract

We investigate the relationship between seasonal migration and informal risk sharing in rural Bangladesh. We use data from a randomized controlled trial which provided incentives for households to migrate (Bryan et al., 2014). Using this experimental variation, we first provide evidence of the effect of decreasing migration costs on endogenous risk sharing in the village. We then investigate the mechanisms of this effect. We undertake a semi-parametric analysis of the source of income shocks, source of insurance and measurement error. Next, we characterize a dynamic model of migration and endogenous risk sharing, incorporating investment in learning about migration possibilities. Estimation of the model is in progress; we plan to analyze the welfare effect of alternative policies to encourage migration, such as access to credit and further reductions in the cost of migrating.

Suggested Citation

  • Melanie Morten & Corina Mommaerts & Ahmed Mobarak & Costas Meghir, 2015. "Migration and Consumption Insurance in Bangladesh," 2015 Meeting Papers 190, Society for Economic Dynamics.
  • Handle: RePEc:red:sed015:190
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