CASH TRANSFERS AND MIGRATION: THEORY AND EVIDENCE FROM A RANDOMIZED CONTROLLED TRIAL

Will the fast expansion of cash-based programming in poor countries increase international migration? Theoretically, cash transfers may deter migration by increasing its opportunity cost or favor migration by re-laxing liquidity, credit, and risk constraints. This paper evaluates the impact of a cash-for-work program on migration. Randomly selected households in Comoros were offered up to US$320 in cash in exchange for their partic-ipation in public works projects. We find that the program increased international migration by 38% from 7.8% to 10.8%. The increase in migration appears to be driven by the alleviation of liquidity and risk constraints.