Hitotsubashi Institute for Advanced Study

HIAS-E-109

Mobile money and shock-coping:
Urban migrants and rural families in Bangladesh under the COVID-19 shock

Abstract:

People in developing economies face substantial income risks and use diverse strategies to mitigate the negative welfare impact. Rural households often send migrants to diversify income sources and depend on remittances to cope with income risks. To examine the risk-coping mechanism of urban migrants and their rural families against the aggregate shock due to the COVID-19 pandemic, we analyze the seven-round Bangladeshi household panel covering the period before and after the first implementation of COVID-19 lockdown policies. Our event study finds that urban migrants experienced more substantial income loss than their rural families and reduced but not ceased remittances to cope with the aggregate shock jointly. Notably, mobile money services allowed them to continue sending remittances even under the lockdown policies.

Report No.: HIAS-E-109
Author(s): Hiroyuki Egami (a), Yukichi Mano (b), Tomoya Matsumoto (c)
Affiliation: (a) Nihon University
(b) Hitotsubashi University
(c) Otaru University of Commerce
Issued Date: August 2021
Keywords: migrants, remittances, risk coping, aggregate shock, mobile money, COVID-19
JEL: O12, O15, F23
Links: PDF, HERMES-IR, RePec,