permanent migration and remittances in ethiopia
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INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 1
Permanent Migration and Remittances in Ethiopia
June 24, 2010
Alan de BrauwLisa MoormanValerie MuellerTassew Woldehanna
2
Urbanization Trends for SSA
3
Some urbanization is good
Geographic concentration of labor conducive for agglomeration economies and growth
More effective to provide services in areas concentrated with people (e.g., sanitation, health, electricity, infrastructure) • More cost-effective• Easier for citizens to access
Migration into urban areas may be too low, and we want to understand why
4
Relevant policies
National Population Policy (1993)• discourages rural urban migration
because excessive it can create urban slams, violence and exacerbate crimes
It is only after the 2005, the GoE seems to understand rural-urban migration is key for development
E.g. for the time, Tigray Regional state planned to facilitate rural urban migration
Change of mind The most urbanized region in Ethiopia
5
Registration process inhibits RU migration
You need to stay 6 months before you register as urban dweller
This means you can get government support
You need to have an address, i.e. a house or be a member of a HH who owns a house
An ordinary migrant can not be successful in this
Social network is very important
6
Migration benefits people
Releases resources for hh members Creates additional employment
opportunities Additional income available to hh
(remittances) Risk coping Investments in human and physical
capital
7
Research Gaps
Very few migration studies on Ethiopia Migration behavior not well understood Data to analyze migration is often
incomplete • Studies that focus on source hh reports
exclude migrant destination information• Studies that focus on migrants lose
information on comparable non-migrants and household members left behind
• We have a matched migrant sample which allows us to examine the benefits realized by the migrant and the relatives he leaves behind
8
Objectives
Migration patterns out of 18 kebeles
Matching migrant and hh panel to examine• Determinants of migration by type• Migration benefits
Experienced by migrantExperienced by migrant households
9
Matched Sample
Ethiopian Rural Household Survey (ERHS) • Focus on 2004-5 and 2009 rounds (18
kebeles)
Tracking survey follows migrants from 2004-5• Older than 10 years• Moved for employment, schooling (now
work), loss of land, resettlement program, and to follow family
• Relative of household head
10
11Source: Schmidt and Kedir (2009)
12
13
Migration by Destination Type
14
Rural-to-rural migration most common Partially explains why urbanization is
low
Has implications on determinants of migration
Migrants will likely move to local places• Where they have connections• Cost of move is cheaper• Opportunity cost of move to household
lower if remain close
15
16
Migrant’s Characteristics
% %
Male 62.0 Amhara 30.4
Ages 19-40 yrs
83.40 Oromo 20.0
Single 57.2 Tigrayan 12.5
<5 years ed 17.9 Orthodox christian
53.0
5-8 years ed. 30.4 Protestant 26.8
9+ years ed. 35.1 Muslim 15.3
17
Occupations of Migrants
Prior to migration
Post-migration
Farm worker 43.0 14.1
Daily laborer 3.5 23.3
Domestic work/housekeeper
9.6 12.8
Self-employed 5.1 16.6
Teacher 1.6 12.1
Student 32.4 0.6
Other salaried employment
1.3 11.2
Other/unemployed 3.5 9.3
Migrants 312 313
18
Household Head Characteristics by Migration Status
Non-migranthouseholds
Migranthouseholds
Diff. in means
Mean SD Mean SD T stat.
Age 50.2 14.8
54.2 13.5
-3.97
Has non-ag job 0.03 0.18
0.08 0.27
-2.47
Oromo 0.34 0.47
0.24 0.43
2.81
Kembata 0.04 0.19
0.10 0.29
-2.48
Gedeo 0.09 0.28
0.05 0.21
2.11
Muslim 0.26 0.44
0.15 0.36
2.87
Males (ages 16-40)
0.92 0.86
1.26 1.04
-5.09
Ln(land) 0.19 0.95
-0.05 1.13
2.75
Support network outside of village
0.19 0.39
0.28 0.45
-2.88
Source: ERHS, 2004-5
19
Determinants of Migration
Wage differential Migrant Networks Capital market imperfections
• Land scarcity• Income risk
20
Land Scarcity and Rights
% Migrants
Land registered in migrant’s name prior to his move
18.3 311
Migrant’s departure affected the right to use land in the ERHS village
1.9 313
Migrant or his family had the right to transfer land to someone else when moved
77.6 313
Family’s land is certified 87.5 313
Having shortage of land impacted decision to move
39.9 313
Source: Migrant Tracking Survey, 2009
21
Risk
Moved year of shock
MovedYear after shock
Total
Shock Hh. Freq. % Hh. Freq. % %
Food price rise
26 8.3 28 9.0 17.3
Death of familyMember
13 4.2 10 3.2 7.4
Illness of family member
10 3.2 13 4.2 7.4
Pests or diseases affecting crops/livestock
15 4.8 11 3.5 8.3
Drought 19 6.1 24 7.7 13.8
Migrants 313 313
Source: Migrant Tracking Survey, 2009; ERHS, 2009
22
Household Shock Exposure by Migration Status
No migrants
TrackedMigrants
Diff in means
Mean SD Mean SD T stat.
Drought 2001 (EC) 0.02 0.12
0.02 0.15 -0.68
Drought 2000 (EC) 0.24 0.43
0.34 0.47 -2.76***
Drought 1999 (EC) 0.03 0.18
0.04 0.20 -0.53
Drought 1998 (EC) 0.02 0.12
0.01 0.09 1.03
Rise in food prices 2001 (EC)
0.11 0.31
0.10 0.29 0.49
Rise in food prices 2000 (EC)
0.40 0.49
0.44 0.50 -1.38
Rise in food prices 1999 (EC)
0.06 0.23
0.06 0.24 -0.32
Rise in food prices 1998 (EC)
0.00 0.06
0.01 0.09 -0.94
Death or illness in last five years
0.34 0.47
0.42 0.49 -2.22**
Households 1212 221
Source: ERHS, 2009
23
Empirical Model
2009,1
2004,2009, h
J
jjhhh VShockXM
X: female headship, age, occupation, literacy, ethnicity, support network outside of village, livestock, land, male and female labor endowment
Shock: self-reported drought 2000, death or illness in last five years
24
Migration Probability Results
≤1 ≤1 RR ≤1 RR ≤1 RU ≤1 RU
migrant
migrant 1
migrant 2
migrant 1
migrant 2
Male Labor endowment
+ + + + +, NS
Network + + + +, NS +, NS
Land - -, NS -, NS -, NS -, NS
Drought risk 2000
+, NS + +, NS +, NS +, NS
Death/illness last 5 years
+, NS -, NS -, NS + +, NS
RR: rural-rural RU: rural-urban1: Defines urban as woreda with >50,000 people2: Defines urban according to 20% agglomeration index
25
Welfare Implications of Migration
Channels of welfare benefits• Auxiliary income through remittances• Additional resources from migrant’s
absence Consumption changes
• Source households• Individual Migrants
Changes in subjective well-being• Heads of source households
26
Remittances
Generally remittance rate of internal migrants is lower than rate of international migrants
Africa tends to have lowest rates• China (2000): 66.4 percent• El Salvador (2008): 70.8 percent• South Africa (1993): 29.7 percent• Ethiopia (2009): 33 percent
Conditional on sending remittances, average sent to hh in 2009 was 716 Birr (6.7 % per capita GDP)
27
No migrants
Trackedmigrants
Diff in mean change
ERHS 04-5 09 04-5 09 T stat
Months had problems satisfying food needs last year
2.48 2.97 2.44 3.43
-1.86*
Suffered shortage of food last rainy season 0.60 0.60 0.60 0.63
-0.73
During worst month…
times adults ate/day 1.99 1.75 2.01 1.81
-0.44
times kids ate/day 2.45 2.06 2.46 2.02
0.42
During best month…
times adults ate/day 2.95 2.62 2.97 2.99
-1.55
times kids ate/day 3.32 2.88 3.37 2.85
0.54
Times last week ate meat 0.41 0.61
-1.60
Times last week ate animal products 2.80 3.37
-1.55
Times last week ate cereals 11.18
9.94
2.24**
Household Food Scarcity by Migration Status over Time (ERHS)
28
Comparing Consumption of Migrants versus Source Households (2009)
Average, Migrants
Average, MigrantHouseholds
Diff in meansT stat
Consumption of Food Items in Past 7 Days
Meat 0.40 0.13 7.02***
Animal Products 0.67 0.44 4.90***
Grains 0.95 0.94 0.23
Frequency of Consumption, Past 7 Days
Meat 0.83 0.42 3.25***
Animal Products 3.12 3.33 -0.53
Grains 8.42 10.03 -3.35***
29
Comparing Consumption Changes of Migrants
Average, Migrants(2009)
Average, MigrantHouseholds(2004-5)
Diff in meansT stat
Consumption of Food Items in Past 7 Days
Meat 0.40 0.20 4.61***
Animal Products 0.67 0.50 3.62***
Grains 0.94 0.81 4.37***
30
Changes in Subjective Well-beingStatement Non-
mig /Mig
Non-mig /Mig
In the last month, things are going well for me
+/0 Compared to other hhs in the village, I am rich
I am richer than my father was at my age
Thinking about my own hh, I would say we are rich
My life is close to ideal I can obtain 100 Birr within a week in an emergency
+/+
The conditions of my life are excellent
+/- Compared to a year ago, hh economic situation is much better
I am satisfied with my life
+/- Three years ago, I was rich
So far I have gotten the important things I want in life
Five years ago, I was rich
If I could live my life over, I would change almost nothing
In general, I would describe my household as able to meet their needs
Taken all together I would say I am happy
+/-
31
Discussion
Migration low and predominantly rural-rural• agglomeration economies and future
growth?• provision and expansion of public
services to many Ethiopians will be cost-prohibitive
Migration is insurance related• Little land and shocks increase migration
Suggestive evidence that migrants may benefit from moving• Policies to reduce barriers of migration
Lack of remittances and lack of changes in source households welfare suggest members are ejected from household to relax constraints
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