Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial

CSAE working paper WPS/2019-16

67 Pages Posted: 7 Jan 2020

See all articles by Jules Gazeaud

Jules Gazeaud

J-PAL Middle East and North Africa

Eric Mvukiyehe

World Bank

Olivier Sterck

University of Antwerp - Institute of Development Policy; University of Oxford - Department of International Development; University of Oxford - Centre for the Study of African Economies (CSAE)

Date Written: December 5, 2019

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, Liquidity Constraint, Credit Constraint, Risk-aversion

JEL Classification: J61, O12, O15, F22

Suggested Citation

Gazeaud, Jules and Mvukiyehe, Eric and Sterck, Olivier, Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial (December 5, 2019). CSAE working paper WPS/2019-16, Available at SSRN: https://ssrn.com/abstract=3504553 or http://dx.doi.org/10.2139/ssrn.3504553

Jules Gazeaud

J-PAL Middle East and North Africa ( email )

Eric Mvukiyehe

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Olivier Sterck (Contact Author)

University of Antwerp - Institute of Development Policy ( email )

Belgium

University of Oxford - Department of International Development ( email )

3 Mansfield Road
Oxford, OX1 3TB
United Kingdom

University of Oxford - Centre for the Study of African Economies (CSAE) ( email )

Oxford OX1 3UL
United Kingdom

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