Labour migration is intensifying. Yet, inadequate data on migration and remittances prohibits understanding of migration’s role in the agricultural transformation process. Insights from literature suggest migration and household decision-making dynamics influence future investments in agriculture and thus farming activity. Studies also show credit constraints, risk and uncertainty, and lack of insurance to be responsible for the low performance of farming activity. From this perspective, migration and remittances have implications for farm productivity via relaxing liquidity constraint and reducing labour availability. Hence, understanding how migration and remittances impact rural investment is critical for understanding the likely impacts of rural demographic changes on rural transformation. This project works towards this goal in the context of rural farm households in Ethiopia.
The study uses three waves of the nationally representative Ethiopian Socioeconomic Panel Surveys, started in 2011-12 and collected three times every other year. The first wave of data included 3,776 representative households from all regions in the country. The second wave in 2013-14 and the third in 2015-16 had 5,262 households. With this rich survey data the research team first explore what factors determine rural labour outmigration and its impacts on the economic activities of household members left behind including farm and off-farm investments. Moreover, it investigates if the effect is heterogeneous across farmers’ land size, who migrates, male or female, and migrant destination. To explore these outcomes, descriptive statistics and a more robust inferential analysis are adopted.
From a policy perspective, both farming activity and labour outmigration are considered the two primary livelihood strategies for large agrarian societies in Africa. Furthermore, remittances from migrants have increasingly been growing. Understanding how rural labour outmigration and income from remittances impacts rural investment provides valuable inputs for policymakers in their effort to reduce poverty. Thus, findings from this study will initiate policymakers and development planners to design context-specific migration policy and to account for migration government strategies. Moreover, it helps to justify the need for policy initiatives that will facilitate less costly and hassle-free flow of remittances into national development.