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Insurance motives to remit: Evidence from a matched sample of Ethiopian internal migrants

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  • de Brauw, Alan
  • Mueller, Valerie
  • Woldehanna, Tassew

Abstract

Migration and remittances can be used by rural households as a means of insurance, investment, and income augmentation. Ample attention has been given to studying international remittance flows, since for many countries such transfers comprise a significant fraction of income. Remittance flows from internal migrants are relatively understudied, particularly in Africa, where remittance rates are poor. We use a unique matched migrant sample to study what drives the low remittance rates in Ethiopia. Descriptive statistics suggest remitters are positively selected in terms of wealth characteristics compared with the average tracked migrant. Limited skill transferability and liquidity largely explain low remittance rates in Ethiopia. Weaker evidence suggests migrants are additionally motivated to remit as a form of self-insurance against own shocks to income and investments towards future inheritable assets.

Suggested Citation

  • de Brauw, Alan & Mueller, Valerie & Woldehanna, Tassew, 2011. "Insurance motives to remit: Evidence from a matched sample of Ethiopian internal migrants," ESSP working papers 25, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:esspwp:25
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    Cited by:

    1. Mduduzi Biyase & Fiona Tregenna, 2016. "Determinants of remittances in South Africa," SALDRU Working Papers 176, Southern Africa Labour and Development Research Unit, University of Cape Town.
    2. Yonas Alem & Lisa Andersson, 2019. "International Remittances and Private Interhousehold Transfers: Exploring the Links," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(4), pages 902-928, September.
    3. Mhairi A Gibson & Eshetu Gurmu, 2012. "Rural to Urban Migration Is an Unforeseen Impact of Development Intervention in Ethiopia," PLOS ONE, Public Library of Science, vol. 7(11), pages 1-8, November.
    4. Andersson, L., 2014. "Migration, remittances and household welfare in Ethiopia," MERIT Working Papers 2014-004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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