Remittances and Household Behavior in the Philippines
AbstractAs one of the world’s largest recipients of remittances, the Philippines received remittances roughly 12% of its gross domestic product in 2008. Remittances have become the single most important source of foreign exchange to the economy and a significant source of income for recipient families. Using the instrument variable estimation technique, this study examines the role of remittances in increasing household consumption and investment and thereby their potential for rebalancing economic growth and creating long-term human and capital investment. The results indicate that remittances negatively influence the share of food consumption in the total expenditure. However, unlike previous studies, the estimations show that remittances to the Philippines do not have a significant influence on other key items of consumption or investment such as spending on education and health care. A further analysis using logistical regression shows that remittances help to lift households out of poverty. Remittances thus may help in fighting poverty in the Philippines but not in rebalancing growth, especially in the long run.
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Bibliographic InfoPaper provided by Asian Development Bank in its series ADB Economics Working Paper Series with number 188.
Length: 36 pages
Date of creation: Dec 2009
Date of revision:
Remittances; migrants; household consumption; investment; poverty; Philippines;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-20 (All new papers)
- NEP-DEV-2010-02-20 (Development)
- NEP-MIG-2010-02-20 (Economics of Human Migration)
- NEP-SEA-2010-02-20 (South East Asia)
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- Yaw Nyarko and Kwabena Gyimah-Brempong, 2011.
"Social Safety Nets: The Role of Education, Remittances and Migration,"
EUI-RSCAS Working Papers
26, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
- Yaw Nyarko & Kwabena Gyimah-Brempon, 2011. "Social Safety Nets: The Role of Education, Remittances and Migration," RSCAS Working Papers 2011/26, European University Institute.
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