Document Type
Discussion Paper
Publication Date
7-10-2019
CFDP Number
2185R2
CFDP Update Date
December 22, 2020
CFDP Pages
96
Journal of Economic Literature (JEL) Code(s)
D12, D91, D52, O12, R23
Abstract
We document that an experimental intervention offering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the effect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable profitable migration. We estimate the model and find that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing.
Recommended Citation
Meghir, Costas; Mobarak, Ahmed Mushfiq; Mommaerts, Corina; and Morten, Melanie, "Migration and Informal Insurance" (2019). Cowles Foundation Discussion Papers. 2588.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2588