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Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks

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Dean Yang (University of Michigan and NBER)

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Abstract

This paper distinguishes between target-earnings and life cycle motivations for return migration by examining how Philippine migrants' return decisions respond to major, unexpected exchange rate changes in their overseas locations (due to the Asian financial crisis). Overall, the evidence favors the life cycle explanation: more favorable exchange rate shocks lead to fewer migrant returns.A10% improvement in the exchange rate reduces the 12-month return rate by 1.4 percentage points. However, some migrants appear motivated by target-earnings considerations: in households with intermediate foreign earnings, favorable exchange rate shocks have the least effect on return migration, but lead to increases in household investment. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/rest.88.4.715
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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 88 (2006)
Issue (Month): 4 (December)
Pages: 715-735
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Handle: RePEc:tpr:restat:v:88:y:2006:i:4:p:715-735

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References listed on IDEAS
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  4. George J. Borjas & Bernt Bratsberg, 1994. "Who Leaves? The Outmigration of the Foreign-Born," NBER Working Papers 4913, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Yang, Dean, 2005. "International migration, human capital, and entrepreneurship : evidence from Philippine migrants'exchange rate shocks," Policy Research Working Paper Series 3578, The World Bank. [Downloadable!]
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  8. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April. [Downloadable!] (restricted)
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  10. Galor, Oded & Stark, Oded, 1990. "Migrants' Savings, the Probability of Return Migration and Migrants' Performance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 463-67, May. [Downloadable!] (restricted)
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  15. Lalonde, Robert J. & Topel, Robert H., 1993. "Economic impact of international migration and the economic performance of migrants," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 14, pages 799-850 Elsevier. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gordon H. Hanson, 2008. "The Economic Consequences of the International Migration of Labor," NBER Working Papers 14490, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Silvio Rendon & Alfredo Cuecuecha, 2007. "International Job Search: Mexicans in and out of the U.S," Working Papers 0709, Centro de Investigacion Economica, ITAM. [Downloadable!]
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  3. Yang, Dean, 2005. "International migration, human capital, and entrepreneurship : evidence from Philippine migrants'exchange rate shocks," Policy Research Working Paper Series 3578, The World Bank. [Downloadable!]
    Other versions:
  4. Jeffrey Grogger & Gordon H. Hanson, 2008. "Income Maximization and the Selection and Sorting of International Migrants," NBER Working Papers 13821, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Albert Park & Dean Yang & Xinzheng Shi & Yuan Jiang, 2009. "Exporting and Firm Performance: Chinese Exporters and the Asian Financial Crisis," NBER Working Papers 14632, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Adams, Richard H., Jr. & Cuecuecha, Alfredo & Page, John, 2008. "The impact of remittances on poverty and inequality in Ghana," Policy Research Working Paper Series 4732, The World Bank. [Downloadable!]
  7. John Gibson & David McKenzie, 2009. "The Microeconomic Determinants of Emigration and Return Migration of the Best and Brightest: Evidence from the Pacific," CReAM Discussion Paper Series 0903, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
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  8. Blanchflower, David G. & Lawton, Helen, 2008. "The Impact of the Recent Expansion of the EU on the UK Labour Market," IZA Discussion Papers 3695, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Zakharenko, Roman, 2007. "Migration, Learning, and Development," MPRA Paper 6262, University Library of Munich, Germany. [Downloadable!]
  10. Prachi Mishra & Antonio Spilimbergo, 2009. "Exchange Rates and Wages in an Integrated World," IMF Working Papers 09/44, International Monetary Fund. [Downloadable!]
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