Melanie Morten

Settlement Patterns and the Geographic Mobility of Recent Migrants to New Zealand

Twenty-three percent of New Zealands population is foreign-born and forty percent of migrants have arrived in the past ten years. Newly arriving migrants tend to settle in spatially concentrated areas and this is especially true in New Zealand. This paper uses census data to examine the characteristics of local areas that attract new migrants and gauges the extent to which migrants are choosing to settle where there are the best labour market opportunities as opposed to where there are already established migrant networks. We estimate McFaddens choice models to examine both the initial location choice made by new migrants and the internal mobility of this cohort of migrants five years later. This allows us to examine whether the factors that affect settlement decision change as migrants spend more time in New Zealand.

A Personal Touch: Text Messaging for Loan Repayment

We worked with two microlenders to test impacts of randomly assigned reminders for loan repayments in the “text messaging capital of the world”. We do not find strong evidence that loss versus gain framing or messaging timing matter. Messages only robustly improve repayment when they include the loan officer’s name. This effect holds for clients serviced by the loan officer previously but not for first-time borrowers. Taken together, the results highlight the potential and limits of communications technology for mitigating moral hazard, and suggest that personal obligation/reciprocity between borrowers and bank employees can be harnessed to help overcome market failures.

A personal touch in text messaging can improve microloan repayment

Because payment delays and defaults significantly affect both lenders and borrowers in fragile economies, strategies to improve timely loan repayment are needed to help make credit markets work smoothly. We worked with two microlenders to test the impact of randomly assigned text message reminders for loan repayments in the Philippines. Messages improved repayment only when they included the account officer’s name and only for clients serviced by the account officer previously. These results highlight the potential and limits of communication technology for improving loan repayment rates. They also suggest that personal connections between borrowers and bank employees can be harnessed to help overcome market failures.

Temporary Migration and Endogenous Risk Sharing in Village India

When people can self-insure via migration, they may have less need for informal risk sharing. At the same time, informal insurance may reduce the need to migrate. To understand the joint determination of migration and risk sharing, I study a dynamic model of risk sharing with limited commitment frictions and endogenous temporary migration. First, I characterize the model. Second, I structurally estimate the model using the new ICRISAT panel from rural India. Third, I introduce a rural employment scheme. The policy reduces migration and decreases risk sharing, lowering the welfare gain of the policy.