for ��� representing initial individual-level characteristics (marital status, individual educational attainment, gender, and age) which might influence the level of consumption, and for �h representing the initial household-level fixed effects on consumption. The inclusion of initial household fixed effects aims to identify the impact of migration using variation between members of the initial household (Beegle, De Weerdt, and Dercon 2011). The difference-in-difference approach eliminates all time-invariant additive selection bias, and its combination with household fixed effects makes it possible to eliminate observable heterogeneity in time-invariant individual characteristics within the household. The remaining time-varying individual-level omitted heterogeneity is eliminated through the instrumental variables approach.

For reasons introduced earlier, Equation (3) is not only estimated through an OLS procedure, but also through a 2SLS procedure after identifying variables that influence the decision to migrate, but not consumption growth. Exclusion variables that are used are those instruments not correlated with changes in per capita consumption except through the migration channel. Several instruments are adapted to our data to satisfy the exclusion tests.<sup>11</sup> Five excluded instruments were retained. First, an individual’s position within the household – whether he or she is a head or spouse of the head; child of the head; and male child of the head – is used as an excluded instrument as this reflects the social and family norms that generate variation in the likelihood of migration among household members. If a family were to choose the member who will migrate, then the household would need to assess its impact on family labor needs and weigh the expected costs and benefits of migration before choosing whether the head, spouse, or other members would be the mover. Depending on the existing migration opportunities and the demand for certain skills for jobs at the destination, the head or spouse could be the one to migrate. We can also expect male children of the head or any child of the head – irrespective of the gender – to be more likely to leave the home community than others in the household. These individual positions in the household are used as excluded instruments because head or spouse, children, or male children will have the same per capita consumption levels unless they migrate.

The second excluded instrument is the interaction between the share of migrants with their same ethnicity in urban areas (based on census data) and being a young adult at baseline (aged 15 to 24 years). This interaction term reflects one’s urban migrant network coupled with different migration opportunities and incentives for young adults (male and female) to engage in low-skill labor or for young female adults to migrate for marriage purposes. The use of the share of migrants with the same ethnicity in urban areas—drawn from the 2002 census data—as an instrument is not only inspired by recent panel tracking studies, but also by Muto (2012), who points to the importance of shared ethnicity as a factor for migration destination decisions in Uganda. This instrument is expected to positively influence urban migration or negatively influence rural migration. It can be assumed that, if two individuals with different urban migrant networks have different welfare paths, it will be due to differences in their migration status – after controlling for the individual characteristics in ��� .

The interaction between the log of the number of fatalities from conflict and being a young adult (aged 15 to 24 years) is the third excluded instrument; a negative coefficient expresses that, in communities

> 11 The interaction between an individual’s age rank in the household and being a young adult (aged 14-24 years) was used to indicate a higher probability for older adults to migrate than younger adults. This variable did not prove to be a valid instrument (IV model satisfying instrument relevance, lack of over-identification, and efficiency over OLS).

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