Economic Impacts of Overseas Labor Migration on Household Income and Expenditure in the Philippines

Polina Koriukina

No 03-2023, EGEIWP from Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro"

Abstract: This paper studies the local community-level effects of Filipino labor migration on the income and expenditure of households. Using the IV method, it examines the effects of district-level migration rates on fifteen different categories of household income and expenditure, which altogether form the core of household income and expenditure structure. Migration is shown to have no significant impact on families’ total income or expenditure. However, it is negatively associated with the wages and salaries of families left behind. Determining whether this result reflects the moral hazard problem or the takeover of the departed migrant’s household chores by another family member (or any other explanation) is beyond the scope of this paper. The effect on receipts from abroad is, expectedly, positive and significant. Concerning household expenditure by category, no significant effect of migration was detected, except for migrants’ educational attainment having a positive and significant effect on education spending, which together with medical care spending is sometimes referred to as households’ ‘investments in human capital’. It is also positively associated with expenditures on durable goods and equipment, as well as housing and utilities. The main contribution to the literature is that, for the first time, the relationship between labor migration and economic outcomes has been analyzed at the district level. Considering the well-documented positive effects of Filipino overseas migration on various dimensions of household welfare at the level of individual households, regions, and the whole nation, the fact that neither total income nor expenditure is affected by the rate of local communities’ migration might entail that, at this level of governance, the Philippine migration policy framework is lacking. Further research is required to foster a more thorough understanding of the interrelationship between migration and household economic outcomes at the local community level and inform the meso-level migration policy in the Philippines.

Date: 2023-12, Revised 2023-12
New Economics Papers: this item is included in nep-inv, nep-mig, nep-sea and nep-ure
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