# **V. Impact of migration on welfare in Uganda**

Measuring the causal impact of migration on welfare is not a straightforward task. McKenzie and Sasin (2007) identify three main methodological problems. The first relates to selection bias as individuals who elect to migrate tend to differ from non-migrants on a range of characteristics and dimensions, and these differences may also shape welfare outcomes. The second problem is omitted variable bias, which arises if there are certain unobserved or unobservable characteristics that simultaneously drive the decision to migrate and welfare outcomes – but are unaccounted for in the estimation model. Another problem is reverse causality, which can occur when an outcome of interest actually causes the migration event. Moving out might result in one being less poor, but the non-poor might be those who are actually moving out. McKenzie and Sasin (2007) thus propose the use of randomized experiments to surmount these problems and measure a causal link between migration and poverty. In the absence of experimental data, however, the use of migrant panel data can address most of these methodological concerns in assessing the welfare impact of migration (McKenzie and Sasin 2007; Beegle, De Weerdt, and Dercon 2011).

This section draws on two rounds of longitudinal data to estimate the returns to migration through an instrumental variables approach. We make use of an individual migrant panel sample covering the period 2005/06 to 2009/10. A panel sample of 18,600 individuals was tracked from 3,123 parent households originally surveyed in 2005/06 (Figure 1). After restricting the individual panel sample to those aged 10 and above at baseline (2005/06), the final sample used in this section consists of a panel of 12,600 individuals, 10,850 (86%) of whom had remained in their original communities (“stayers”) and 1,750 (14%) of whom had migrated to other communities (“movers”) by 2009/10. Among movers, 38% were ruralrural migrants, 5% were urban-rural migrants, 29% were rural-urban migrants, and 28% were urban-urban migrants. Descriptive evidence presented later in this section shows differences in per-capita consumption between movers and stayers, and between movers to rural areas versus movers to urban areas. However, these differences might not necessarily arise from migration itself or the migration destination choice, and would hence require the use of an appropriate methodology for assessing the welfare impact of migration.

_Figure 1: UNHS 2005/6 and UNPS2009/10 Household and Individual Tracking Sample_ <!-- Start of picture text --> 2,415 households 15,709 individuals 10,850 panel<br>individuals<br>re-surveyed in ( 15,646 panel and 63<br>aged 10+ at<br>original location attrited) baseline<br>192 moved<br>(intact) 1,177 individuals 777 panel<br>individuals<br>2,975 households ( 1,163 panel and 14 aged 10+ at<br>households tracked & re- attrited) baseline<br>surveyed<br>surveyed in<br>3,123 2009/10<br>"parent" UNPS<br>households<br>surveyed in<br>2005/06 148 "parent" 368 split-off 973 panel<br>UNHS households households 1,791 panel individuals aged<br>not surveyed tracked & individuals 10+ at baseline<br>in 2009/10 surveyed<br>UNPS (5%)<br><!-- End of picture text --> 15