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Cash transfers and migration: theory and evidence from a randomized controlled trial

Jules Gazeaud, Eric Mvukiyehe and Olivier Sterck ()

NOVAFRICA Working Paper Series from Universidade Nova de Lisboa, Faculdade de Economia, NOVAFRICA

Abstract: Will the fast expansion of cash-based programming in developing countries increase international migration? Theoretically, cash transfers may favor international migration by relaxing liquidity, credit, and risk constraints. But transfers, especially those conditional upon staying at home, may also increase the opportunity cost of migrating abroad. This paper evaluates the impact of a cash-for-work program on migration. Randomly selected households in Comoros were offered up to US$320 in cash in exchange for their participation in public works projects. We find that the program increased migration to Mayotte – the neighboring and richer French Island – by 38 percent, from 7.8% to 10.8%. The increase in migration is explained by the alleviation of liquidity and risk constraints, and by the fact that the program did not increase the opportunity cost of migration for likely migrants.

Keywords: Migration; cash transfers; financial constraints; risk-aversion (search for similar items in EconPapers)
JEL-codes: J61 O12 O15 F22 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2020
New Economics Papers: this item is included in nep-dev, nep-exp, nep-lab and nep-mig
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Working Paper: Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial (2019) Downloads
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