Seasonal migration and micro-credit in the lean period: evidence from northwest Bangladesh

Shonchoy Abu S.

No 294, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper investigates the relationship between access to micro-credit and temporary seasonal migration, an issue which is largely ignored in the standard rural-urban migration literature. Seasonal migration due to agricultural downturns is a common phenomenon in developing countries. Using primary data from a cross-sectional household survey from the northwest part of Bangladesh, this study quantifies the factors that influence such migration decisions. Among other results, we find that network effects play a significant role in influencing the migration decision, with the presence of kinsmen at the place of destination having considerable impact. Seasonal migration is a natural choice for individual suffering periodic hardship; however the strict weekly loan repayment rules of Micro-credit Institutes can have an adverse effect on this process, reducing the ability of borrowers to react to a shock. Our result suggests that poor individuals prefer the option of not accessing the micro-credit and opt for temporal seasonal migration during the lean period. The results have numerous potential policy implications, including the design of typical micro-credit schemes.

Keywords: Bangladesh; Microfinance; Population movement; Lean period; Seasonal migration; Micro-credit (search for similar items in EconPapers)
JEL-codes: G21 J62 J64 J65 O15 O18 R23 (search for similar items in EconPapers)
Date: 2011-03-01
New Economics Papers: this item is included in nep-ban, nep-mfd and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 294. 2011-03-01

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