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Risk sharing and internal migration

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  • De Weerdt, Joachim
  • Hirvonen, Kalle

Abstract

Over the past two decades, more than half the population in rural Tanzania migrated within the country, profoundly changing the nature of traditional institutions such as informal risk sharing. Mass internal migration has created geographically disperse networks, on which the authors collected detailed panel data. By quantifying how shocks and consumption co-vary across linked households, they show how migrants unilaterally insure their extended family members at home. This finding contradicts risk-sharing models based on reciprocity, but is consistent with assistance driven by social norms. Migrants sacrifice 3 to 7 percent of their very substantial consumption growth to provide this insurance, which seems too trivial to have any stifling effect on their growth through migration.

Suggested Citation

  • De Weerdt, Joachim & Hirvonen, Kalle, 2013. "Risk sharing and internal migration," Policy Research Working Paper Series 6429, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6429
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ambler, Kate, 2015. "Don't tell on me: Experimental evidence of asymmetric information in transnational households," Journal of Development Economics, Elsevier, vol. 113(C), pages 52-69.
    2. Molina Millán, Teresa, 2015. "Regional Migration, Insurance and Economic Shocks: Evidence from Nicaragua," IZA Discussion Papers 9494, Institute for the Study of Labor (IZA).
    3. Joachim De Weerdt & Kalle Hirvonen, 2016. "Risk Sharing and Internal Migration," Economic Development and Cultural Change, University of Chicago Press, vol. 65(1), pages 63-86.
    4. Luc Christiaensen & Joachim Weerdt & Yasuyuki Todo, 2013. "Urbanization and poverty reduction: the role of rural diversification and secondary towns," Agricultural Economics, International Association of Agricultural Economists, vol. 44(4-5), pages 435-447, July.
    5. Ingelaere, Bert & Christiaensen, Luc & De Weerdt, Joachim & Kanbur, Ravi, 2018. "Why secondary towns can be important for poverty reduction – A migrant perspective," World Development, Elsevier, vol. 105(C), pages 273-282.
    6. Parag Mahajan & Dean Yang, 2017. "Taken by Storm: Hurricanes, Migrant Networks, and U.S. Immigration," NBER Working Papers 23756, National Bureau of Economic Research, Inc.
    7. Lucia Corno & Alessandra Voena, 2016. "Selling daughters: age of marriage, income shocks and the bride price tradition," IFS Working Papers W16/08, Institute for Fiscal Studies.
    8. Hirvonen, Kalle & Lilleør, Helene Bie, 2015. "Going Back Home: Internal Return Migration in Rural Tanzania," World Development, Elsevier, vol. 70(C), pages 186-202.
    9. Geng, Xin & Ide, Vera & Janssens, Wendy & Kramer, Berber & van der List, Marijn, 2017. "Health insurance, a friend in need? Evidence from financial and health diaries in Kenya," IFPRI discussion papers 1664, International Food Policy Research Institute (IFPRI).
    10. De Weerdt, Joachim & Genicot, Garance & Mesnard, Alice, 2014. "Asymmetry of Information within Family Networks," IZA Discussion Papers 8395, Institute for the Study of Labor (IZA).
    11. Kleemans, Marieke, 2015. "Migration Choice under Risk and Liquidity Constraints," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 200702, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    12. Parag Mahajan & Dean Yang, 2017. "Taken by Storm: Hurricanes, Migrant Networks, and U.S. Immigration," Working Papers 17-50, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    Population Policies; Consumption; Anthropology; Inequality; Labor Policies;

    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
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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