Alternate Instruments to Manage the Capital Flow Conundrum: A Study of Selected Asian Economies

The paper analyses a nationally representative data set from India for the year 2013 in order to provide evidence on how short term migration is affected by household's ownership of land, and participation in agricultural activities. It estimates a recursive bivariate probit model recognizing the simultaneity between short term migration and decision to operate land. The results of the likelihood ratio test imply that it would be incorrect to ignore this simultaneity. Households with less than 1 hectare of land and those leasing out land are more likely to have a short term migrant (STM). Households leaving their land fallow, a common occurrence in south Asia, are more likely to have a STM. Moreover, choice of crops and livestock farming has a significant role to play in migration decision. Current initiatives to increase coverage of irrigation and facilitating access to formal finance could improve livelihoods of small and marginal farmers thereby reducing the probability of distress short-term migration.