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

Abstract

Will the fast expansion of cash-based programming in poor countries increase international migration? Theoretically, cash transfers may deter migration by increasing its opportunity cost or favor migration by relaxing liquidity, credit, and risk constraints. 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 international migration by 38 percent, from 7.8% to 10.8%. The increase in migration appears to be driven by the alleviation of liquidity and risk constraints.

Publication
Review of Economics and Statistics (forthcoming)
Date