Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial

Abstract

Any opinions expressed here are those of the author(s) and not those of NOVAFRICA. Research published in this series may include views on policy, but the center itself takes no institutional policy positions.NOVAFRICA is a knowledge center created by the Nova School of Business and Economics of the Nova University of Lisbon. Its mission is to produce distinctive expertise on business and economic development in Africa. A particular focus is on Portuguese-speaking Africa,

Migration from Developing Countries: Selection, Income Elasticity and Simpson's Paradox

“…4 In a developing country with relatively high average incomes and extensive networks of low-income migrants to assist other low-income migrants (θ > 0), such as Mexico, selection on unobservables might be intermediate or slightly negative (Fernández-Huertas 2011; Ambrosini and Peri 2012). A richer model would include the decision e ects of uncertainty in the destination wage, w 1 , which could further raise the slope of p(w 0 ) ( Batista and McKenzie 2019;Bah and Batista 2018), particularly if higher-income families are better able to self-insure (Gazeaud et al 2019).…”

The freedom to choose: Theory and quasi-experimental evidence on cash transfer restrictions

“…Cash transfers could affect indebtedness in two opposite ways. While some households have been observed to spend the extra income from cash transfers to pay off debts or reduce demand for loans (Angelucci et al, 2012;Aker, 2017;Hoddinott et al, 2018), others could also be perceived to be more creditworthy and subsequently take out more loans (Merttens et al, 2013;Merttens and Jones, 2014;Angelucci, 2015;Gazeaud et al, 2021;Torkelson, 2020). Our research contributes to this literature by considering debt as one factor that can undermine the effectiveness of cash transfers.…”

The Emigration Life Cycle: How Development Shapes Emigration from Poor Countries

“…Models incorporating uncertainty in earnings abroad could likewise accentuate the positive ef-fects of rising incomes on emigration prevalence (Batista and McKenzie 2019;Bah and Batista 2018). Families with more disposable income could have greater ability to self-insure against that risk and thus be more likely to make the attempt (Gazeaud et al 2019).…”

“…A di erent strand of work explores the relationship between income and emigration at the household level. It nds that individual families with exogenously higher income exhibit greater tendency to emigrate, from Mexico (Orrenius and Zavodny 2005;McKenzie and Rapoport 2007;Angelucci 2015;Görlach 2019), rural Bangladesh (Bryan, Chowdhury and Mobarak 2014), Indonesia (Bazzi 2017), Comoros (Gazeaud et al 2019), and Honduras (Millán et al 2020)-a literature surveyed by Adhikari and Gentilini (2018). Clemens and Mendola (2020) nd the same pattern using observational di erences in income across households in 99 developing countries.…”