This paper analyses the relationship between attitudes toward risk and household migration decisions in a rural-developing country setting. We build a model that studies migration decisions when risk preferences among family members are heterogeneous. Our model implies that (i) conditional on migration gains, less risk averse individuals are more likely to migrate; (ii) within households, the least risk averse individual is more likely to emigrate; and (iii) across households, the most risk averse households are more likely to send migrants as long as they have at least one family member that is sufficiently risk loving. Using unique data for China on risk attitudes of internal (rural-urban) migrants and their families that are left behind we find clear evidence for all these predictions. Our results not only provide strong evidence that migration decisions are taken on the level of the household, but also that  risk attitudes of household members other than the migrant affect not only individual migrations but also whether a household sends a migrant at all.

Joint work with C. Dustmann, X. Meng and L. Minale