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Migration and Consumption Insurance in Bangladesh

Listed author(s):
  • Melanie Morten

    (Stanford University)

  • Corina Mommaerts

    (Yale University)

  • Ahmed Mobarak

    (Yale University)

  • Costas Meghir

    (Yale University)

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.

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File URL: https://economicdynamics.org/meetpapers/2015/paper_190.pdf
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Paper provided by Society for Economic Dynamics in its series 2015 Meeting Papers with number 190.

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Date of creation: 2015
Handle: RePEc:red:sed015:190
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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