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Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks

  • Dean Yang

This paper distinguishes between target-earnings and life-cycle motivations for return migration by examining how Philippine migrants%u2019 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. A 10% 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.

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File URL: http://www.nber.org/papers/w12396.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12396.

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Date of creation: Jul 2006
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Publication status: published as Yang, Dean. "Why Do Immigrants Return To Poor Countries? Evidence From Philippine Migrants' Responses To Exchange Rate Shocks," Review of Economics and Statistics, 2006, v88(4,Nov), 715-735.
Handle: RePEc:nbr:nberwo:12396
Note: ED ITI LS
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