Amy L. Damon

Agricultural Land Use and Asset Accumulation in Migrant Households: the Case of El Salvador

Abstract This paper examines the effect that international migration and remittances have on agricultural outcomes at the household level in El Salvador. Panel data are used to examine land use allocations, agricultural asset accumulation, and agricultural input use and returns. Findings suggest that migration and remittances cause a household to reallocate land away from commercial cash crops toward the production of subsistence food crops. There is weak evidence that migration and remittances contribute positively to agricultural asset accumulation in the form of land and livestock holdings. Further, results suggest that migration and remittance do not affect agricultural input use and may decrease the returns to land and labour on farm, as migrant households farm their land less intensively than non-migrant households.

Migration responses to adverse household shocks: do family relationships and types of shocks matter?

This paper estimates how family relationships between migrants and their households affect migration and remittance responses to three different household shocks: an earthquake, the death of a family member, and livestock death. Using agricultural household panel data from El Salvador, we find that migrant responses to negative shocks change across family relationships and the type of shock. Sisters of the household head return home after an earthquake, while sons and brothers migrate away after livestock deaths, and household heads migrate away after the death of a family member. We also find that remittances received by the household significantly fall in response to earthquakes.

Microfinance bundling and consumer protection: experimental evidence from Colombia

ABSTRACT Bundling micro-insurance with loans should help not only decrease costs and therefore increase take-up but may also decrease financial inclusion if the insurance and/or loan are refused. We implement a randomised control trial in which a voluntary crop micro-insurance product is offered jointly with a loan application or separately (at a later date). The delayed offer of insurance did not influence overall insurance take-up or coverage amount but had heterogeneous impacts by crop, supporting the idea that bundling microfinance products is an opportunity more than a constraint. Yet, low product understanding also highlights the need for well-designed and effective consumer protection policies.

Asymmetric Information in Microinsurance Markets: Experimental Evidence from Mexico

Microinsurers strive to simplify products and their pricing, a trend that runs counter to the customization and complex underwriting of insurance in richer markets. While necessary to reduce costs and reach wide scale, this trend opens microinsurance markets to problems of information asymmetries. We use a large dataset from a Mexican bank that offers a life insurance policy to its borrowers at a unique rate. We exploit an exogenous determinant of insurance purchase to test for systematic use of asymmetric information. We find evidence of strategic behavior on the part of borrowers stemming primarily from insurers not using available client information. This is contrary to the conventional asymmetric information problem which rest on self-selection based on unobservable characteristics. In addition to providing evidence about asymmetric information in a new insurance market, this research has policy implications for the design of microinsurance products and for increasing financial access in developing countries.