Logo
Munich Personal RePEc Archive

Microfinance and Vulnerability to Seasonal Famine in a Rural Economy: Evidence from Monga in Bangladesh

Berg, Claudia and Emran, M. Shahe (2017): Microfinance and Vulnerability to Seasonal Famine in a Rural Economy: Evidence from Monga in Bangladesh.

Warning
There is a more recent version of this item available.
[thumbnail of MPRA_paper_80189.pdf]
Preview
PDF
MPRA_paper_80189.pdf

Download (1MB) | Preview

Abstract

This paper takes advantage of a unique data set on 143,000 poor households from northern Bangladesh to analyze the effects of microfinance membership on a household’s ability to cope with seasonal famine known as Monga. We develop an instrumental variables strategy that exploits a jump and a kink at the 10 decimal (0.1 acre) land ownership threshold driven by MFI screening process to ensure repayment by excluding the ultra-poor. Evidence from the local 2SLS estimator (Dong, 2017) shows that microfinance membership improves food security during the hungry season, especially for the poorest households who struggle to survive at the margin of 1 and 2 meals a day. Microfinance membership also reduces the probability of short-term migration for work during Monga, but is ineffective in reducing the incidence of advance sale of labor at low wages. These conclusions are also supported by estimates from minimum-biased IPW estimator of Millimet and Tchernis (2013) that reduces bias without imposing exclusion restrictions.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.