LATEST PUBLICATIONS
DP 2020-23
Innovating Governance: Building Resilience against COVID-19 Pandemic and Other Risks
PN 2020-07
Bottlenecks to formalization of small-scale mining in PH
SEARCA MOSE 2020 10
Technology and Investment Profile of Soybean Roast Products
SEARCA MOSE 2020 9
Technology and Investment Profile of Soya Chips
Publication Detail
WPS 3578: International migration, human capital, and entrepreneurship: Evidence from Philippine migrants' exchange rate shocks

Millions of households in developing countries receive financial support from family members working overseas. How do the economic prospects of overseas migrants affect origin-household investments-in particular, in child human capital and household enterprises? Yang examines Philippine households' responses to overseas members' economic shocks. Overseas Filipinos work in dozens of foreign countries which experienced sudden (and heterogeneous) changes in exchange rates due to the 1997 Asian financial crisis. Appreciation of a migrant's currency against the Philippine peso leads to increases in household remittances received from overseas. The estimated elasticity of Philippine peso remittances with respect to the Philippine/foreign exchange rate is 0.60. In addition, these positive income shocks lead to enhanced human capital accumulation and entrepreneurship in origin households. Favorable migrant shocks lead to greater child schooling, reduced child labor, and increased educational expenditure in origin households. More favorable exchange rate shocks also raise hours worked in self-employment and lead to greater entry into relatively capital-intensive enterprises by migrants' origin households.

World Bank
Authors Keywords
World Bank; migrant workers; macroeconomic policy; macro structuralist model; poverty reduction;
Download PDF Number of Downloads
Published in 2005 and available in the World Bank website or can be downloaded as full text Downloaded 670 times since November 25, 2011