Does Migration Improve Living Standards of Migrant-Sending Households? Evidence from Rural Ethiopia

This paper aims to evaluate the impact of migration on household welfare, in particular the consumption expenditure in Ethiopia, using cross-sectional data collected from 1,200 rural households from four different regions in 2014. We estimate a counterfactual distribution of household consumption per capita, using a Heckman selection model to control and test for selection bias, to analyse to what extent households have gained from having a migrant. Our results suggest that on average, migration has a positive impact on the rural living standards but that gains are not distributed evenly across the consumption distribution. We find that poorer households in fact experience a decline in living standards by having a migrant.