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

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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

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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

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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

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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

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Determinants of Migration

Wage differential Migrant Networks Capital market imperfections

• Land scarcity• Income risk

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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

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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

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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

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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

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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

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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

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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)

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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)

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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***

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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***

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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

+/-

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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