Coping with shocks: the impact of Self-Help Groups on migration and food security

Timothée Demont (1)

1 AMSE - Aix-Marseille Sciences Economiques

This paper asks whether local savings and credit associations help poor rural households hit by climatic shocks. Combining data from an original field experiment with meteorological data, I investigate how Self-Help Groups (SHGs) allow households to cope with rainfall shocks in villages of East India over a sevenyear period. I show that SHGs withstand large rainfall shocks remarkably, and that credit flows are very stable in treated villages. As a result, treated households experience a higher food security during the lean season following a drought and increase seasonal migration to mitigate future income shocks. These results imply that small-scale financial institutions like SHGs help to finance temporary risk management strategies and to cope with important covariate income shocks such as droughts.

Mots clés: microfinance; weather shocks; risk management; seasonal migration; food security

Domaines: Economies et finances

Timothée Demont. Coping with shocks: the impact of Self-Help Groups on migration and food security. 2020. ⟨halshs-02571730⟩