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International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks

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  • Dean Yang

Abstract

How do households respond to overseas members' economic shocks? Overseas Filipinos in dozens of countries experienced sudden, heterogeneous changes in exchange rates during the 1997 Asian financial crisis. Appreciation of a migrant's currency against the Philippine peso leads to increases in household remittances from overseas. The estimated elasticity of Philippine-peso remittances with respect to the exchange rate is 0.60. Positive migrant shocks lead to enhanced human capital accumulation and entrepreneurship in origin households. Child schooling and educational expenditure rise, while child labour falls. Households also work more hours in self-employment, and become more likely to start relatively capital-intensive household enterprises. Copyright © 2008 The Author(s).

Suggested Citation

  • Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
  • Handle: RePEc:ecj:econjl:v:118:y:2008:i:528:p:591-630
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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I2 - Health, Education, and Welfare - - Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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