Heterogeneous Effects of Migration and Remittances on Migrant- Sending Agricultural Communities: The Case of Southern Ethiopia

Abstract

Using household survey data, the paper empirically evaluates the heterogeneous effects of migration and remittances on migrant-sending communities in southern Ethiopia. A multi-stage stratified sampling procedure was used to select sample villages from each survey area and households from each sample unit. To account for several econometric issues and consistently estimate the impacts of migration and remittances, the study adopted a three-stage least-squares method complemented with endogeneity and multicollinearity test. The findings of the paper reveal that the migration of labor out of agriculture has a significant negative effect on a household’s adoption of different agricultural technologies, as well as crop yield. By contrast, the remittances sent by migrants partially compensate for the lost-labor deficit, leading to increased use of modern agricultural inputs and crop yield. Besides, it’s observed that the adoption of different agricultural technology is invariant to the migrants’ gender. Overall, the return of migration suggests that the adoption of modern agricultural technologies and crop yield in migrant-sending communities are found to be higher after migration participation, though the impacts vary for households with different production conditions.