Remittances and Poverty in Migrants’ Home Areas: Evidence from the Philippines

Claudia Martínez Alvear and Dean Yang
Authors registered in the RePEc Author Service: Claudia Martínez A.

Working Papers from University of Chile, Department of Economics

Abstract: In many developing countries, remittance receipts from overseas are importantsupplements to household income. How do these remittance flows affect poverty andinequality in migrants’ home areas? To answer this question, we take advantage ofexogenous shocks to the remittance receipts of Philippine households. Filipino migrantswork in a variety of foreign countries, and experienced sudden changes in exchange ratesdue to the 1997 Asian financial crisis. Appreciation of a migrant’s currency against thePhilippine peso leads to increases in household remittance receipts, and reductions inpoverty in migrants’ origin households. We find evidence of spillovers to householdswithout migrant members, focusing on cross-regional variation in the mean exchange rateshock experienced by the region’s migrants. In regions with more favorable meanexchange rate shocks, aggregate poverty rates decline even in households withoutmigrant members. However, we find no strong evidence of effects on region-levelinequality.

Keywords: migration; remittances; poverty; inequality; exchange rates; Philippines (search for similar items in EconPapers)
JEL-codes: D81 F22 F32 O12 O15 (search for similar items in EconPapers)
Date: 2007-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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