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Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks

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Dean Yang

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Abstract

This paper distinguishes between target-earnings and life-cycle motivations for return migration by examining how Philippine migrants%u2019 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. A 10% 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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12396.

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Date of creation: Jul 2006
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Handle: RePEc:nbr:nberwo:12396

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Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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References listed on IDEAS
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Cited by:
(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. 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)
  3. 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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  4. 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!]
  5. 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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