By Shawn Thacker
June 22, 2021
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Photo by Creative Kayes, Shutterstock
To cope with seasonal poverty and unexpected shocks such as floods or illnesses, rural residents in poor agricultural communities in Bangladesh often share resources with each other or migrate to urban areas in search of work. A new study led by Yale economists explores how these coping strategies are related, and how encouraging more migration affects the entire community’s welfare.
For the study, the authors combined an experiment in which some community members were provided a subsidy to cover the cost of travel with a model of the complex interactions between informal insurance networks and migration choices. They found that the distribution of migration subsidies to some individuals increased informal risk-sharing (i.e. sharing money, food, or other resources with community members in times of need)