IDEAS home Printed from https://ideas.repec.org/a/bla/devpol/v42y2024i3ne12762.html
   My bibliography  Save this article

Non‐farm activity reduces migration: Evidence from Bangladesh

Author

Listed:
  • Kazi Iqbal
  • Md Nahid Ferdous Pabon
  • Mohammad Rezoanul Hoque
  • Nahian Azad Shashi

Abstract

Motivation Anecdotal evidence suggests that local non‐farm opportunities slow down rural–urban migration. However, there is hardly any empirical evidence on the relation between household non‐farm income and migration. Understanding this relation is essential for rural development strategies, sustainable urban development, and policies that influence domestic migrations. Purpose We examine whether households' decision to send a member to urban areas for employment depends on the extent of their non‐farm income and, in turn, on local non‐farm opportunities. We also study how this impact is dependent on household income, education of the household head, and land holdings. Methods and approach Households' decision to migrate or to choose non‐farm employment is endogenous, likely to be influenced by unobserved characteristics. We construct local measures of non‐farm opportunities at the Union (lowest administrative) level using Economic Census data. Local opportunities are exogenous to household decisions and are used to instrument household‐level non‐farm income. Findings Regression results using instrumental variables show that a greater share of non‐farm income reduces the probability that members of the household will migrate to other districts. This effect is most pronounced for semi‐rural areas such as municipalities. We find similar results when we use areas with small and medium enterprise (SME) clusters to instrument household‐level non‐farm income. We also observe substantial heterogeneity of impact: a higher share of non‐farm income deters migration more for income‐rich, land‐poor and educated households. Policy implications Our results suggest that creating non‐farm opportunities curbs migration to urban areas. Developing rural growth centres, secondary towns, may reduce migration to larger cities and reduce poverty.

Suggested Citation

  • Kazi Iqbal & Md Nahid Ferdous Pabon & Mohammad Rezoanul Hoque & Nahian Azad Shashi, 2024. "Non‐farm activity reduces migration: Evidence from Bangladesh," Development Policy Review, Overseas Development Institute, vol. 42(3), May.
  • Handle: RePEc:bla:devpol:v:42:y:2024:i:3:n:e12762
    DOI: 10.1111/dpr.12762
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/dpr.12762
    Download Restriction: no

    File URL: https://libkey.io/10.1111/dpr.12762?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Luc Christiaensen & Joachim Weerdt & Yasuyuki Todo, 2013. "Urbanization and poverty reduction: the role of rural diversification and secondary towns," Agricultural Economics, International Association of Agricultural Economists, vol. 44(4-5), pages 435-447, July.
    2. Wouterse, Fleur & Taylor, J. Edward, 2008. "Migration and Income Diversification:: Evidence from Burkina Faso," World Development, Elsevier, vol. 36(4), pages 625-640, April.
    3. Luc Christiaensen & Ravi Kanbur, 2017. "Secondary Towns and Poverty Reduction: Refocusing the Urbanization Agenda," Annual Review of Resource Economics, Annual Reviews, vol. 9(1), pages 405-419, October.
    4. Kazi Iqbal & Md Nahid Ferdous Pabon & Md Wahid Ferdous Ibon, 2023. "Examining rural income and employment in Bangladesh: A case of structural changes in the rural nonfarm sector in a developing country," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(3), pages 364-387, July.
    5. Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July.
    6. Gharad Bryan & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2014. "Underinvestment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh," Econometrica, Econometric Society, vol. 82(5), pages 1671-1748, September.
    7. David McKenzie & Hillel Rapoport, 2011. "Can migration reduce educational attainment? Evidence from Mexico," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1331-1358, October.
    8. Ahmed Mushfiq Mobarak & Maira Emy Reimão, 2020. "Seasonal Poverty and Seasonal Migration in Asia," Asian Development Review, MIT Press, vol. 37(1), pages 1-42, March.
    9. Kazi Iqbal & Paritosh K. Roy, 2015. "Climate Change, Agriculture And Migration: Evidence From Bangladesh," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(02), pages 1-31.
    10. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    11. Sen, Binayak & Dorosh, Paul & Ahmed, Mansur, 2021. "Moving out of agriculture in Bangladesh: The role of farm, non-farm and mixed households," World Development, Elsevier, vol. 144(C).
    12. Hassani-Mahmooei, Behrooz & Parris, Brett W., 2012. "Climate change and internal migration patterns in Bangladesh: an agent-based model," Environment and Development Economics, Cambridge University Press, vol. 17(6), pages 763-780, December.
    13. Luc Christiaensen & Ravi Kanbur, 2017. "Secondary Towns and Poverty Reduction: Refocusing the Urbanization Agenda," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 405-419, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ingelaere, Bert & Christiaensen, Luc & De Weerdt, Joachim & Kanbur, Ravi, 2018. "Why secondary towns can be important for poverty reduction – A migrant perspective," World Development, Elsevier, vol. 105(C), pages 273-282.
    2. repec:lic:licosd:41119 is not listed on IDEAS
    3. Sen, Binayak & Dorosh, Paul & Ahmed, Mansur, 2021. "Moving out of agriculture in Bangladesh: The role of farm, non-farm and mixed households," World Development, Elsevier, vol. 144(C).
    4. Kanbur, Ravi & Christiaensen, Luc & Ingelaere, Bert & De Weerdt, Joachim, 2017. "Why Secondary Towns Can Be Important for Poverty Reduction – A Migrant’s Perspective," CEPR Discussion Papers 12193, C.E.P.R. Discussion Papers.
    5. Ravi Kanbur & Luc Christiaensen & Joachim De Weerdt, 2019. "Where to create jobs to reduce poverty: cities or towns?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 543-564, December.
    6. Christine M. Sauer & Thomas Reardon & Nicole M. Mason, 2023. "The poor do not pay more: Evidence from Tanzanian consumer food expenditures controlling for the food environment," Agricultural Economics, International Association of Agricultural Economists, vol. 54(5), pages 638-661, September.
    7. Ezra Berkhout & Lucie Sovová & Anne Sonneveld, 2023. "The Role of Urban–Rural Connections in Building Food System Resilience," Sustainability, MDPI, vol. 15(3), pages 1-22, January.
    8. Omoniyi Alimi & Geua Boe-Gibson & John Gibson, 2022. "Noisy Night Lights Data: Effects on Research Findings for Developing Countries," Working Papers in Economics 22/12, University of Waikato.
    9. Bastian, Jacob E. & Black, Dan A., 2024. "Relaxing financial constraints with tax credits and migrating out of rural and distressed America," Journal of Public Economics, Elsevier, vol. 234(C).
    10. Juan Ignacio Zoloa, 2020. "Noise pollution and housing markets: A spatial hedonic analysis for La Plata City," Ensayos de Política Económica, Departamento de Investigación Francisco Valsecchi, Facultad de Ciencias Económicas, Pontificia Universidad Católica Argentina., vol. 3(2), pages 129-152, Octubre.
    11. Mulubrhan Amare & Channing Arndt & Kibrom A Abay & Todd Benson, 2020. "Urbanization and Child Nutritional Outcomes," The World Bank Economic Review, World Bank, vol. 34(1), pages 63-74.
    12. Desbureaux, Sébastien & Rodella, Aude-Sophie, 2019. "Drought in the city: The economic impact of water scarcity in Latin American metropolitan areas," World Development, Elsevier, vol. 114(C), pages 13-27.
    13. De Weerdt,Joachim & Christiaensen,Luc & Kanbur,Ravi, 2021. "When Distance Drives Destination, Towns Can Stimulate Development," Policy Research Working Paper Series 9622, The World Bank.
    14. Davis, C. Austin & Mobarak, Ahmed Mushfiq, 2020. "The challenges of scaling effective interventions: A path forward for research and policy," World Development, Elsevier, vol. 127(C).
    15. Kanbur, Ravi & Christiaensen, Luc & De Weerdt, Joachim, 2017. "Cities, Towns, and Poverty: Migration Equilibrium and Income Distribution in a Todaro-type Model with Multiple Destinations," CEPR Discussion Papers 11994, C.E.P.R. Discussion Papers.
    16. Amare, Mulubrhan & Arndt, Channing & Guo, Zhe & Seymour, Greg, 2024. "Variation in women’s attitudes toward intimate partner violence across the rural–urban continuum in Ethiopia," World Development, Elsevier, vol. 174(C).
    17. Tanvir Pavel & Syed Hasan & Nafisa Halim & Pallab Mozumder, 2018. "Natural Hazards and Internal Migration: The Role of Transient versus Permanent Shocks," Working Papers 1806, Florida International University, Department of Economics.
    18. Ubaid Ali & Mazhar Mughal & Lionel de Boisdeffre, 2023. "Migrant remittances, agriculture investment and cropping patterns," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 899-920, September.
    19. Cattaneo, Andrea & Adukia, Anjali & Brown, David L. & Christiaensen, Luc & Evans, David K. & Haakenstad, Annie & McMenomy, Theresa & Partridge, Mark & Vaz, Sara & Weiss, Daniel J., 2022. "Economic and social development along the urban–rural continuum: New opportunities to inform policy," World Development, Elsevier, vol. 157(C).
    20. Mohammad Rafiqul Islam & Masud Alam & Munshi Naser .Ibne Afzal & Sakila Alam, 2021. "Nighttime Light Intensity and Child Health Outcomes in Bangladesh," Papers 2108.00926, arXiv.org, revised Sep 2022.
    21. Md Shahadath Hossain & Adesola Sunmoni, "undated". "Do Remittances Influence Household Investment Decisions? Evidence from Sub-Saharan Africa," Economics Discussion Papers em-dp2021-04, Department of Economics, University of Reading.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:devpol:v:42:y:2024:i:3:n:e12762. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/odioruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.