Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 665: Migration as an Adaptation Strategy to Weather Variability: An Instrumental Variables Probit Analysis

Yonas Alem (), Mathilde Maurel and Katrin Millock
Additional contact information
Yonas Alem: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden
Mathilde Maurel: CNRS-Centre d'Economie de la Sorbonne, and FERDI
Katrin Millock: CNRS-Paris School of Economics

Abstract: There is solid scientific evidence predicting that a large part of the developing world will suffer a greater incidence of extreme weather events, which may increase the incidence of displacement migration. We draw on the new economics of migration to model migration decisions of smallholder and rain-dependent farm households in rural Ethiopia and investigate both the ex-ante and ex-post impacts of climate variables. Using detailed household survey panel data matched with rainfall data, we show that weather variability - measured by the coeffcient of variation of rainfall - has a strong positive impact on the probability of sending a migrant. This implies that households engage in migration to cope with risk ex-ante. We also find evidence suggesting that rainfall shocks have ex-post impact on households' likelihood of migration, but the effect is not statistically significant at the conventional levels. Instrumental variables probit regression results also show that controlling for endogeneity of income using a credible instrument is important to identify its impact on the decision to send a migrant. Our findings have important implications for policies aiming to improve the capacity of vulnerable households to adapt to climate change.

Keywords: climate change; drought; Ethiopia; household survey; migration; rainfall.

JEL-codes: O15; Q54; R23

26 pages, June 2016

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