Risk sharing and internal migration

Joachim De Weerdt and Kalle Hirvonen

No 2015.04, IOB Working Papers from Universiteit Antwerpen, Institute of Development Policy (IOB)

Abstract: Over the past two decades, more than half the population in our sample of rural Tanzanians has migrated out of their home-communities. We hypothesize that this powerful current of internal migrants is changing the nature of traditional institutions such as informal risk sharing. Mass internal migration has created geographically disperse networks, on which we collected detailed panel data. By quantifying how shocks and consumption co-vary across linked households we show that, while both migrants and stayers insure negative shocks to stayers, there is no one in the network who insures the migrants’ negative shocks. While migrants do share some of their positive shocks, they ultimately end up nearly twice as rich as those at home by 2010, despite practically identical baseline positions in the early nineties prior to migration. Taken together, these findings point to migration as a risky, but profitable endeavour, for which the migrant will bear the risk and also reap most of the benefit. We interpret these results within the existing literature on risk-sharing and on the disincentive effects of redistributive norms.

Keywords: internal migration; risk; insurance; institutions; Africa; tracking data (search for similar items in EconPapers)
JEL-codes: O12 O15 O17 R23 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-04
New Economics Papers: this item is included in nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://medialibrary.uantwerpen.be/oldcontent/cont ... eWeerdt-Hirvonen.pdf (application/pdf)

Related works:
Journal Article: Risk Sharing and Internal Migration (2016)
Working Paper: Risk-sharing and internal migration (2015)
Working Paper: Risk sharing and internal migration (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iob:wpaper:201504

Access Statistics for this paper

More papers in IOB Working Papers from Universiteit Antwerpen, Institute of Development Policy (IOB) Contact information at EDIRC.
Bibliographic data for series maintained by Hans De Backer ().