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Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks

  • McKenzie, David


    (World Bank)

  • Theoharides, Caroline


    (University of Michigan)

  • Yang, Dean


    (University of Michigan)

We use an original panel dataset of migrant departures from the Philippines to identify the responsiveness of migrant numbers and wages to GDP shocks in destination countries. We find a large significant elasticity of migrant numbers to GDP shocks at destination, but no significant wage response. This is consistent with binding minimum wages for migrant labor. This result implies that labor market imperfections that make international migration attractive also make migrant flows more sensitive to global business cycles. Difference-in-differences analysis of a minimum wage change for maids confirms that minimum wages bind and demand is price sensitive without these distortions.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6498.

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Length: 41 pages
Date of creation: Apr 2012
Date of revision:
Publication status: published in: American Economic Journal: Applied Economics, 2014, 6(2), 49-75.
Handle: RePEc:iza:izadps:dp6498
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References listed on IDEAS
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  1. Dean Yang, 2006. "International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," NBER Working Papers 12325, National Bureau of Economic Research, Inc.
  2. David McKenzie & John Gibson & Steven Stillman, 2006. "How Important is Selection? Experimental vs Non-experimental Measures of Income Gains from Migration," Working Papers in Economics 06/03, University of Waikato, Department of Economics.
  3. John Gibson & David McKenzie & Steven Stillman, 2013. "Accounting for Selectivity and Duration-Dependent Heterogeneity When Estimating the Impact of Emigration on Incomes and Poverty in Sending Areas," Economic Development and Cultural Change, University of Chicago Press, vol. 61(2), pages 247 - 280.
  4. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
  5. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 83-106, Summer.
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