An interesting experiment was recently undertaken regarding seasonal migration in Bangladesh.
In north-western Bangladesh region of Rangpur, during the season after planting and before harvest (Sept-Nov) rice prices go up while there are few sources of income. This causes a seasonal famine. But only 1/3rd of inhabitants migrate elsewhere in search of jobs.
So a group of researchers tried to see what happens if they offer incentives for migration. The study covered 3 groups: one group was given info about migration, another was given info + credit for bus ticket/food, third group given info + money for bus ticket/food.
So what happened? The cash and credit had the same effect – six months after the incentives, these folks had migrated at the rate of 58%, compared to 36% for those without an incentive. The information? No effect.
And migration pays off. Although about 20% of migrants don’t find a job, the average migrant earns about $110 during the lean season and sends more than half of that back home. This translates into a boost for consumption of around 30-35%. One interesting wrinkle: the incentivized migrants were making (and remitting) less than the non-incentivized migrants. Despite this the folks getting the incentive were more likely to migrate the next year, even without the incentive – their migration rate was 47% against 37% for the non-incentivized.
So the researchers are suggesting using micro-credit for financing seasonal migration, rather than only for creating new entrepreneurs.