Remittances and Poverty in Migrants’ Home Areas: Evidence from the Philippines
AbstractIn many developing countries, remittance receipts from overseas are importantsupplements to household income. How do these remittance flows affect poverty andinequality in migrants’ home areas? To answer this question, we take advantage ofexogenous shocks to the remittance receipts of Philippine households. Filipino migrantswork in a variety of foreign countries, and experienced sudden changes in exchange ratesdue to the 1997 Asian financial crisis. Appreciation of a migrant’s currency against thePhilippine peso leads to increases in household remittance receipts, and reductions inpoverty in migrants’ origin households. We find evidence of spillovers to householdswithout migrant members, focusing on cross-regional variation in the mean exchange rateshock experienced by the region’s migrants. In regions with more favorable meanexchange rate shocks, aggregate poverty rates decline even in households withoutmigrant members. However, we find no strong evidence of effects on region-levelinequality.
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Bibliographic InfoPaper provided by University of Chile, Department of Economics in its series Working Papers with number wp257.
Date of creation: Aug 2007
Date of revision:
migration; remittances; poverty; inequality; exchange rates; Philippines;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- 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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