What is the economic impact of newly introducing mobile money in rural areas underserved by financial services? This study is the first to use a randomized controlled trial to answer this research question. Following a sample of rural communities in Southern Mozambique, our experimental results show that the availability of mobile money translated into clear adoption of these services, measured through administrative data on mobile money transactions. We find that mobile money improved consumption smoothing by treated households, i.e., they became less vulnerable to adverse weather and self-reported shocks. However, we also observe that mobile money led to reduced investment, especially in agriculture. We document increases in the number of migrants in a household and in the migrant remittances received by rural households particularly in presence of adverse shocks, while there are no clear effects on savings.
We interpret these results as evidence that, by drastically reducing the transaction costs associated with migrant remittances and improving migration-based insurance possibilities, mobile money acted as a facilitator of migration from rural to urban areas. Catia Batista is Associate Professor of Economics at the Nova School of Business and Economics, where she is also Founder and Scientific Director of the NOVAFRICA research center. She holds a Ph.D. in Economics from the Department of Economics of the University of Chicago. Catia has research interests related to international migration and remittance flows, financial inclusion, entrepreneurship, technology adoption, education and policy evaluation. She has done work including randomized and lab-in-the-field experiments in countries such as Cape Verde, the Gambia, Ireland, Kenya, Portugal, Mozambique and Sao Tome and Principe.
Catia has taught at the University of Chicago, University of Oxford, Trinity College Dublin, and Notre Dame University. She is currently a Research Fellow at the international research centers CReAM (London, UK) and IZA (Bonn, Germany). Previously, Catia worked at the International Monetary Fund and at the Portuguese Catholic University, and consulted for the World Bank and the International Growth Center.
by 