Junior Migration Webinar

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

with Eric Mvukiyehe and Olivier Sterck

Abstract

Will the fast expansion of cash-based programming in developing countries increase international migration? Theoretically, cash transfers may foster 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 international migration by 38 percent, from 7.8 percent to 10.8 percent. The increase in migration appears to be driven 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.

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