The welfare impact of overseas migration on Philippine households: Analysis using panel data

Abstract

This study uses a panel of some 8,000 households common to the 2007 and 2008 Annual Poverty Indicators Surveys to examine the economic impact of overseas migration on Philippine households. It finds overseas migration to be an important driving factor for household social mobility in the Philippines. Using panel regression analysis, the study shows households that are able to send members overseas experience a windfall in income transfers, but they also incur losses in domestic wages. This moves them up the income ladder, supports their increased consumption – including spending for education, medical care, real property and equipment, food, clothing and recreation – reduces their poverty, and allows them to increase inter-household transfers.

Manufacturing and Services Growth in Developing Economies: ‘Too Little’ Finance?

“…Remittances have a robustly negative and highly significant impact on manufacturing growth. In addition to being another buttress for the ‘Dutch Disease’ story (see, for instance, Acosta et al, 2009; Amuedo-Dorantes and Pozo, 2004; Bourdet and Falck, 2006; Daway-Ducanes, 2018; Hyder and Mahboob, 2005; Lartney et al, 2012; Petri and Saadi-Sedik, 2006; Rabbi, Chowdhurry and Hasan, 2013), the negative impact of remittances on long-run manufacturing growth might be due to the observation that the additional remittances are primarily used for smoothing consumption instead of financing growth-enhancing investment (see, for instance, Combes and Ebeke, 2011; Ducanes, 2015; Mohapatra, Joseph and Ratha, 2012; Pajaron, 2017; Yang, 2008).…”

“…There is thus much conjecture regarding the nature of the channels and mechanisms by which remittances affect a recipient developing economy’s growth prospects. While remittances represent additional disposable incomes to domestic households that enable both higher consumption and investment expenditures and potentially serve as buffers against economic downturns, contributing to poverty alleviation (Ducanes, 2015; Ratha, 2013), much of the literature on remittances and growth find a ‘Dutch Disease’ effect or a negative effect of remittances on growth. This is due to a real appreciation (of the local currency) effect, which may adversely affect export-led growth (See, for instance, Acosta, Baerg and Mandelman, 2009; Amuedo-Dorantes and Pozo, 2004; Bourdet and Falck, 2006; Hyder and Mahboob, 2005; Lartney, Mandelman and Acosta, 2012; Petri and Saadi-Sedik, 2006).…”

Remittances, Dutch Disease, and Manufacturing Growth in Developing Economies

“…While remittances represent additional disposable incomes to domestic households that enable both higher consumption and investment expenditures and potentially serve as buffers against economic downturns, contributing to poverty alleviation (Ratha, 2013;Ducanes, 2015), much of the cross-country literature on remittances corroborate a 'Dutch Disease' story: An increase in remittances results in a real local currency appreciation that renders tradables which are mostly manufactured goods and servicesless competitive in the world market. See, for instance, Bourdet and Falck (2006); Amuedo-Dorantes and Pozo (2004); Hyder and Mahboob (2005); Petri and Saadi-Sedik (2006); Acosta et al (2009) ;Lartney et al (2012); and Rabbi et al (2013).…”

Value and Size Effects in the Stock Market of the Philippines

“…The same author mentioned the importance of overseas remittances in this process. There are several articles describing the importance of these overseas remittances in several areas such as social mobility (Ducanes, 2015) and business cycles (Renato, 2009). It seems clear that the Filipino diaspora has helped brining substantial capital into the country.…”