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Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks

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  • David McKenzie
  • Caroline Theoharides
  • Dean Yang

Abstract

We use an original panel dataset of migrant departures from the Philippines to identify the responsiveness of migrant numbers and wages to GDP shocks in destination countries. We find a large, significant response of migrant numbers to GDP shocks at destination, but no significant wage response. This is consistent with binding minimum wages for migrant labor. This result implies that labor market imperfections that make international migration attractive also make migrant flows more sensitive to global business cycles. Difference-in-differences analysis of a minimum wage change for maids confirms that minimum wages bind and demand is price sensitive without these distortions.

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 6 (2014)
Issue (Month): 2 (April)
Pages: 49-75

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Handle: RePEc:aea:aejapp:v:6:y:2014:i:2:p:49-75

Note: DOI: 10.1257/app.6.2.49
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  1. Dean Yang, 2006. "International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," NBER Working Papers 12325, National Bureau of Economic Research, Inc.
  2. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 25(3), pages 83-106, Summer.
  3. David McKenzie & John Gibson & Steven Stillman, 2006. "How Important is Selection? Experimental vs Non-experimental Measures of Income Gains from Migration," Working Papers in Economics, University of Waikato, Department of Economics 06/03, University of Waikato, Department of Economics.
  4. Gibson, John & McKenzie, David & Stillman, Steven, 2010. "Accounting for selectivity and duration-dependent heterogeneity when estimating the impact of emigration on incomes and poverty in sending areas," Policy Research Working Paper Series 5268, The World Bank.
  5. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, Elsevier, vol. 72(2), pages 429-461, December.
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Cited by:
  1. Francesc Ortega & Giovanni Peri, 2012. "The Role of Income and Immigration Policies in Attracting International Migrants," Working Papers, University of California, Davis, Department of Economics 1214, University of California, Davis, Department of Economics.
  2. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2013. "Multilateral resistance to migration," Journal of Development Economics, Elsevier, Elsevier, vol. 102(C), pages 79-100.
  3. Francesc Ortega & Giovanni Peri, 2012. "The Effect of Income and Immigration Policies on International Migration," NBER Working Papers 18322, National Bureau of Economic Research, Inc.

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