IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v88y2006i4p715-735.html
   My bibliography  Save this article

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

Author

Listed:
  • Dean Yang

    (University of Michigan and NBER)

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.

Suggested Citation

  • Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
  • Handle: RePEc:tpr:restat:v:88:y:2006:i:4:p:715-735
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/rest.88.4.715
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hatton, Timothy J. & Williamson, Jeffrey G, 2002. "What Fundamentals Drive World Migration?," CEPR Discussion Papers 3559, C.E.P.R. Discussion Papers.
    2. Colin Camerer & Linda Babcock & George Loewenstein & Richard Thaler, 1997. "Labor Supply of New York City Cabdrivers: One Day at a Time," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 407-441.
    3. Oded Stark & Christian Helmenstein & Yury Yegorov, 1997. "Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(3), pages 307-324, July.
    4. Dean Yang, 2004. "International Migration, Human Capital, and Entrepreneurship: Evidence from Philippine Migrants’ Exchange Rate Shocks," Working Papers 531, Research Seminar in International Economics, University of Michigan.
    5. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    6. Barry Chiswick & Timothy J. Hatton, 2003. "International Migration and the Integration of Labor Markets," NBER Chapters, in: Globalization in Historical Perspective, pages 65-120, National Bureau of Economic Research, Inc.
    7. 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 274-298, April.
    8. 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.
    9. Philippe Aghion & Patrick Bolton, 1997. "A Theory of Trickle-Down Growth and Development," Review of Economic Studies, Oxford University Press, vol. 64(2), pages 151-172.
    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 463-467, May.
    11. Alice Mesnard, 2004. "Temporary migration and capital market imperfections," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 242-262, April.
    12. Borjas, George J & Bratsberg, Bernt, 1996. "Who Leaves? The Outmigration of the Foreign-Born," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 165-176, February.
    13. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, October.
    14. Dustmann, Christian & Kirchkamp, Oliver, 2002. "The optimal migration duration and activity choice after re-migration," Journal of Development Economics, Elsevier, vol. 67(2), pages 351-372, April.
    15. Rodrik, Dani, 2002. "Feasible Globalizations," CEPR Discussion Papers 3524, C.E.P.R. Discussion Papers.
    16. Larry A. Sjaastad, 1970. "The Costs and Returns of Human Migration," Palgrave Macmillan Books, in: Harry W. Richardson (ed.), Regional Economics, chapter 9, pages 115-133, Palgrave Macmillan.
    17. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    18. Dustmann, Christian & Frattini, Tommaso, 2011. "Immigration: The European Experience," IZA Discussion Papers 6261, Institute of Labor Economics (IZA).
    19. Hill, John K., 1987. "Immigrant decisions concerning duration of stay and migratory frequency," Journal of Development Economics, Elsevier, vol. 25(1), pages 221-234, February.
    20. Borjas, George J, 1989. "Immigrant and Emigrant Earnings: A Longitudinal Study," Economic Inquiry, Western Economic Association International, vol. 27(1), pages 21-37, January.
    21. Djajic, Slobodan & Milbourne, Ross, 1988. "A general equilibrium model of guest-worker migration : The source-country perspective," Journal of International Economics, Elsevier, vol. 25(3-4), pages 335-351, November.
    22. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-559, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks," NBER Working Papers 12396, National Bureau of Economic Research, Inc.
    2. Sílvio Rendon & Alfredo Cuecuecha, 2010. "International job search: Mexicans in and out of the US," Review of Economics of the Household, Springer, vol. 8(1), pages 53-82, March.
    3. Piracha, Matloob & Vadean, Florin, 2009. "Return Migration and Occupational Choice," IZA Discussion Papers 3922, Institute of Labor Economics (IZA).
    4. Faruk, Balli & Syed Abul, Basher & Rosmy, Jean Louis & Ahmed Saber, Mahmud, 2016. "On the global determinants of visiting home," MPRA Paper 72291, University Library of Munich, Germany.
    5. Démurger, Sylvie & Xu, Hui, 2011. "Return Migrants: The Rise of New Entrepreneurs in Rural China," World Development, Elsevier, vol. 39(10), pages 1847-1861.
    6. Kirdar, Murat, 2009. "Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions," MPRA Paper 13322, University Library of Munich, Germany.
    7. KIrdar, Murat G., 2009. "Labor market outcomes, savings accumulation, and return migration," Labour Economics, Elsevier, vol. 16(4), pages 418-428, August.
    8. Marco Di Cintio & Emanuele Grassi, 2016. "The returns to temporary migration: The case of Italian Ph.D.s," EERI Research Paper Series EERI RP 2016/15, Economics and Econometrics Research Institute (EERI), Brussels.
    9. Christian Dustmann & Joseph-Simon Görlach, 2016. "The Economics of Temporary Migrations," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 98-136, March.
    10. Piracha, Matloob & Vadean, Florin, 2010. "Return Migration and Occupational Choice: Evidence from Albania," World Development, Elsevier, vol. 38(8), pages 1141-1155, August.
    11. Yang, Dean, 2009. "International Migration and Human Development," MPRA Paper 19212, University Library of Munich, Germany.
    12. Eduardo Rodríguez-Montemayor & Pablo M. García, 2009. "A Primer of International Migration: The Latin American Experience," IDB Publications (Working Papers) 9327, Inter-American Development Bank.
    13. Manon Domingues Dos Santos & François-Charles Wolff, 2010. "Pourquoi les immigrés portugais veulent-ils tant retourner au pays ?," Économie et Prévision, Programme National Persée, vol. 195(4), pages 1-14.
    14. Theodore Lianos & Anastasia Pseiridis, 2009. "On the occupational choices of return migrants," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(2), pages 155-181, March.
    15. Wahba, Jackline & Zenou, Yves, 2012. "Out of sight, out of mind: Migration, entrepreneurship and social capital," Regional Science and Urban Economics, Elsevier, vol. 42(5), pages 890-903.
    16. I-Ling Shen & Frédéric Docquier & Hillel Rapoport, 2010. "Remittances and inequality: a dynamic migration model," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(2), pages 197-220, June.
    17. Florian Knauth & Jens Wrona, 2018. "There and Back Again: A Simple Theory of Planned Return Migration," CESifo Working Paper Series 7388, CESifo.
    18. Rodríguez-Montemayor, Eduardo & García, Pablo M., 2018. "A Primer of International Migration: The Latin American Experience," IDB Publications (Working Papers) 2544, Inter-American Development Bank.
    19. Murat G. Kirdar, 2012. "Estimating The Impact Of Immigrants On The Host Country Social Security System When Return Migration Is An Endogenous Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 453-486, May.
    20. Knauth, Florian & Wrona, Jens, 2018. "There and back again: A simple theory of planned return migration," DICE Discussion Papers 290, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    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
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:88:y:2006:i:4:p:715-735. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.mitpressjournals.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ann Olson (email available below). General contact details of provider: https://www.mitpressjournals.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.