Teferi Mergo: “Impacts of Green Card Lottery on Ethiopian Households”

If you’re keen on development, check out the series of guest posts by job-market candidates at the World Bank’s Development Impact blog. Here’s UC Berkeley’s Teferi Mergo describing his paper on the effects of international migration on source households:

Although international migration can yield large benefits to individual migrants from poor countries, the net impact of migration on the source countries is unclear… In my job market paper, I add to the literature by focusing on migrants from an extremely poor country – Ethiopia – who are randomly assigned the possibility of migration through the United States’ Diversity Visa lottery. My analysis is based on a specially designed survey (which I conducted) of households of previous DV lottery winners and lottery participants in Addis Ababa…

I was able to get only a complete listing of lottery winners… It is not possible to obtain a comparable list of DV lottery applicants from which to identify lottery losers. Fortunately… around 50% of Addis’ households are conservatively estimated to have played the lottery at one time or another, thus allowing me to draw a representative sample of the control group from the city…

The study finds that having a family member win the lottery and migrate has significant positive effects on several dimensions of the remaining family’s standard of living. Families of DV migrants spend about 30% more on food, are thus better fed and have higher body mass indexes. Moreover, families of winners possess more and better quality consumer durables, which include personal computers, modern cooking stoves, household furniture and home entertainment appliances. Having a family member who won the DV lottery also gives families access to improved sources of drinking water and sanitation facilities. Winners’ families, however, have about the same savings and physical capital accumulation as other families. Most of the positive effects of emigration appear to be on the consumption side of the family budget…

A final interesting conclusion is that participants in the DV lottery (both winners and losers) have substantially higher outcomes than non-participants, suggesting that Ethiopian DV migrants are indeed positively selected. Non-participants have lower food spending, lower variety and value of durables they own, and less access to clean drinking water and convenient sanitation facilities. They are also the least likely to use banking facilities and save. Interestingly, however, lottery non-participants spend more on leisure activities.

Wow, that bears repeating: “Around 50% of Addis’ households are conservatively estimated to have played the [US green card] lottery.”


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