The Effect of Seasonal Migration on Households during Food Shortages in Bangladesh

Project Summary 

The rural north-western districts of Bangladesh experience a pre-harvest seasonal famine, locally known as Monga, with disturbing regularity. Seven percent of the population in Bangladesh (about 9.6 million people) inhabits these districts and about 5.3 million of those live below the poverty line. The suffering during Monga thus is not limited to a small pocket of households. The famine is emblematic of lean season or ‘hungry seasons’ preceding harvests that are widespread across Asia and sub-Saharan Africa.

We conducted a field experiment where incentives to promote seasonal out-migration during Monga were randomly allocated across 1900 households in 100 villages in Lalmonirhat and Kurigram districts. The program included an $8 cash grant (37 villages) or loan (31 villages) to mitigate the cost of moving, information about (and endorsement of) migration (16 villages) and control areas (16 villages), where we tracked regular migration patterns without intervening.  Within each village, we imposed additional conditions to random subsets of households (e.g. migrate in a group or to a specific location).  The randomization allows us to cleanly estimate the effects of migration on household expenditures, savings, earnings, and caloric intake.

We find that seasonal out-migration has large causal benefits for Monga-prone households.  In response to the $8 cash grant or loan, the migration rate increased from 34% in control villages to 57% in treatment (incentive) villages. Total expenditures, food expenditures, and caloric intake increase by 30-35%.  Monthly consumption increased by $15/household.  Caloric intake increased by 700 calories per person per day.  Most strikingly, a year after the treatment (during the next Monga season), migration rates in treatment villages continue to be significantly higher (47% to 35%), even after inducement is removed.  Those who were successful appear to learn about the benefits of migration and voluntarily re-migrate.

These observed positive effects make it puzzling why households fail to take advantage of this apparently attractive investment.  We find that the data are most consistent with a rational model in which people are uncertain about their own return to migration, and do not experiment with this concept for fear of a devastating outcome.  In this migration poverty trap, even if the chance of failure is low, the potential cost of that failure may be so large (e.g. if it moves a family under the threat of famine below subsistence) that it dominates household decision-making.

Our small “incentive to invest” insures against this kind of bad outcome and encourages migration among those who were otherwise less comfortable migrating.  People close to subsistence (facing a larger risk), or those without travel partners, social networks or job leads at the destination (i.e. other forms of insurance) are generally less likely to migrate but are the most responsive to our incentive.  More broadly, these results suggest that allowing people to find jobs may be a very productive use of the micro-credit concept currently more narrowly focused on creating new entrepreneurs.

    Research Partners:
Gharad Bryan (LSE), Shyamal Chowdhury (University of Sydney)

Research Papers
  • G. Bryan, S. Chowdhury and A. M. Mobarak. “Under-Investment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh,” Econometrica, September 2014 (Supplement, Econometrica Link)

    Abstract: Hunger during pre-harvest lean seasons is widespread in the agrarian areas of Asia and Sub-Saharan Africa. We randomly assign an $8.50 incentive to households in rural Bangladesh to temporarily out-migrate during the lean season. The incentive induces 22% of households to send a seasonal migrant, their consumption at the origin increases significantly, and treated households are 8–10 percentage points more likely to re-migrate 1 and 3 years after the incentive is removed. These facts can be explained qualitatively by a model in which migration is risky, mitigating risk requires individual-specific learning, and some migrants are sufficiently close to subsistence that failed migration is very costly. We document evidence consistent with this model using heterogeneity analysis and additional experimental variation, but calibrations with forward-looking households that can save up to migrate suggest that it is difficult for the model to quantitatively match the data. We conclude with extensions to the model that could provide a better quantitative accounting of the behavior.
  • A. Akram, S. Chowdhury and A. M. Mobarak. "Effects of Emigration on Rural Labor Markets", working paper.

    Abstract:
    Rural to urban migration is an integral part of the development process, but there is little evidence on how out-migration transforms rural labor markets. Emigration could benefit landless village residents by reducing labor competition, or conversely, reduce productivity if skilled workers leave. We offer to subsidize transport costs for 5792 potential seasonal migrants in Bangladesh, randomly varying saturation of offers across 133 villages. The transport subsidies increase beneficiaries’ income due to better employment opportunities in the city, and also generate the following spillovers: (a) A higher density of offers increases the individual take-up rate, and induces those connected to offered recipients to also migrate. The village emigration rate increases from 35% to 65%. (b) This increases the male agricultural wage rate in the village by 4.5-6.6%, and the available work hours in the village by 11-14%, which combine to increase income earned in the village, (c) There is no intra-household substitution in labor supply, but primary workers within households earn more during weeks in which many of their village co-residents moved away. (d) The wage bill for agricultural employers increases, which reduces their profit, with no significant change in yield. (e) Food prices increase by 2.7% on net, driven by an increase in the price of (fish) protein, and offset by (f) a decrease in the price of non-tradables like prepared food and tea.  Seasonal migration subsidies not only generate large direct benefits, but also indirect spillover benefits by creating slack in the village-of-origin labor market during the lean season.
  • D. Lagakos, A. M. Mobarak, M. E. Waugh. "The Welfare Effects of Encouraging Rural-Urban Migration", working paper.

    Abstract: This paper studies the welfare effects of encouraging rural-urban migration in the developing world. To do so, we build a dynamic incomplete-markets model of migration in which heterogeneous agents face seasonal income fluctuations, stochastic income shocks, and disutility of migration that depends on past migration experience. We calibrate the model to replicate a field experiment that subsidized migration in rural Bangladesh, leading to significant increases in both migration rates and consumption for induced migrants. The model’s welfare predictions for migration subsidies are driven by two main features of the model and data: first, induced migrants tend to be negatively selected on income and assets; second, the model’s non-monetary disutility of migration is substantial, which we validate using newly collected survey data from this same experimental sample. The average welfare gains are similar in magnitude to those obtained from an unconditional cash transfer, and greater than from policies that discourage migration, though migration subsidies lead to larger gains for the poorest households, which have the greatest propensity to migrate.

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