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Hidden Income and the Perceived Returns to Migration

Last registered on October 10, 2018
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Pre-Trial

Trial Information

General Information

Title
Hidden Income and the Perceived Returns to Migration
RCT ID
AEARCTR-0003101
Initial registration date
October 09, 2018

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 10, 2018, 8:45 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Kenya
Region
Western Province

Primary Investigator

Name
Travis Baseler
Affiliation
University of Rochester
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2016-05-25
End date
2019-09-30
Keywords
Labor, Other
Additional Keywords
migration, perceived returns, hidden income, asymmetric information
JEL code(s)
J61, R12, R23, O15, D82, D83, D84
Secondary IDs
Stanford IRB Protocol ID: 37631
Abstract
The large income gap between urban and rural parts of many poor countries invites the question of why migration does not arbitrage this gap away. Using a sample of households in rural Kenya, I show that individuals on average underestimate urban wages considerably. Randomizing the provision of city-level labor market information to 464 households causes them to update their beliefs about the returns to migration and increases the rate of migration to Nairobi. Treated households earn more income and express a greater desire to send another migrant to Nairobi in the future. To understand how downward-biased beliefs can persist, I collect data on perceptions of migrant earnings from residents of origin villages and match them with data on actual migrant earnings. The data are consistent with strategic income misreporting by migrants: when migrants have a greater incentive to hide income from an origin resident, the origin resident underestimates the migrant's income to a greater degree, and reports a lower belief about his or her own potential return to migration. Finally, I experimentally shock rural individuals' beliefs about migrant earnings and show that this translates into higher beliefs about the returns to migration. Together, these results demonstrate that urban-rural information asymmetries can distort the migration decision and suppress migration to high-wage cities.
External Link(s)

Registration Citation

Citation
Baseler, Travis. 2018. "Hidden Income and the Perceived Returns to Migration." AEA RCT Registry. October 10. https://doi.org/10.1257/rct.3101-1.0
Former Citation
Baseler, Travis. 2018. "Hidden Income and the Perceived Returns to Migration." AEA RCT Registry. October 10. https://www.socialscienceregistry.org/trials/3101/history/35604
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
This study includes two interventions.

Intervention 1 (Urban Labor Market Information): Randomized at the household level. Each treated household is given information sheets with labor market statistics for Nairobi, Kisumu, and Eldoret.

Intervention 2 (Migrant Remittances Information): Randomized at the household level. Treated households told the average share of income remitted by Nairobi migrants to origin (village) households.
Intervention Start Date
2017-01-17
Intervention End Date
2018-04-20

Primary Outcomes

Primary Outcomes (end points)
Intervention 1: Beliefs about the returns to migration, probability of migrating within the year following the intervention, income, self-reported welfare.

Intervention 2: Beliefs about average earnings in Nairobi (unconditional and for migrants), beliefs about the returns to migration, likelihood of migrating within the next year.
Primary Outcomes (explanation)
I have two measures of migration after the intervention for each of the following destination types: any destination, Nairobi, Kisumu, Eldoret, other urban destination, and other rural destination. The two measures are 1.) whether the household sent at least one migrant to that destination after the intervention, and 2.) the number of migrants the household sent to that destination after the intervention. Income will be measured as the sum of individual wage and enterprise income across family members (as defined by the household roster collected at baseline) plus estimated agricultural output (farm-gate value estimated by the household head).

Secondary Outcomes

Secondary Outcomes (end points)
Intervention 1: Remittances, savings, spending on food, investment, whether the household experienced a financial emergency in the past 3 months, whether the household is worried about their finances, and whether the household could cope with a financial shock of 2000 KES.

Intervention 2: Expected share of remittances for the marginal migrant from that household.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Households selected systematically from villages in Bungoma & Kakamega Counties.
Experimental Design Details
Intervention 1 was conducted with 497 households across 15 Western Kenyan villages. Villages were selected by local survey staff according to three criteria: they were no more than two hours away from Bungoma Town by car, they were large enough to find 30 households for survey while leaving enough space in between respondents, and they were not demographically atypical for Bungoma County. Within each village, enumerators were told to sample households systematically: each enumerator, starting from a different position on the main road, would sample the first, fourth, seventh, and tenth household in a straight line from the road. Households were screened to ensure that at least one member aged 18-35 was living there at the time of survey.

Intervention 2 was conducted on the same set of households, excluding households that had migrants in Nairobi at the time of intervention #2 or at the time of the July 2018 midline surveys.

Randomization Method
Treatment status was assigned by a random number generator.
Randomization Unit
Household.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Intervention 1: 497 households. Intervention 2: 340 households.
Sample size: planned number of observations
Intervention 1: 497 households. Intervention 2: 340 households.
Sample size (or number of clusters) by treatment arms
Intervention 1: 249 control households, 248 treatment households. Intervention 2: 167 control households, 173 treatment households.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
Stanford Institutional Review Board
IRB Approval Date
2016-05-25
IRB Approval Number
37631
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials