Remittances are used by households for insurance, investment, and income. Flows from internal migrants are relatively understudied in Africa, where migrants are less likely to remit to their origin households. We use a unique matched migrant sample to study what drives the low remittance rates in Ethiopia. Descriptive statistics suggest remitters are positively selected in terms of wealth characteristics compared with the average tracked migrant. Limited skill transferability and liquidity largely explain low remittance rates in Ethiopia. Migrants are additionally motivated to remit as a form of self-insurance against own shocks to income and to protect their family's productive assets.
- Liquidity constraints
ASJC Scopus subject areas
- Geography, Planning and Development
- Sociology and Political Science
- Economics and Econometrics