The Interaction Between Migrants and Origin Households: Evidence from Linked Data
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Economists’ understanding of the effects of migration has been largely limited to what can be
gleaned from separate surveys of migrants and their origin households. This is problematic when
the interaction between the two parties affects patterns of resource allocation, above and beyond
the direct effects of migration in income and household composition. Using a unique panel
dataset from Bangladesh that includes linked data on migrants and origin households, we assess
the cost of information asymmetries that arise with migration. Variation in migrant travel times
is used to generate variation in the cost of communication between migrants and origin
households. However, because migration, as well as the destination, may be chosen with
information asymmetries in mind, two sets of instrumental variables are employed: lagged
employment shocks at potential destinations and historical migrant networks.