Insuring against Disasters and Poor Institutions: Remittances as Aid and Informal Family Insurance during Typhoon Haiyan in the Philippines

Christopher James R. Cabuay and Budy P. Resosudarmo

Journal of Development Studies, 2025, vol. 61, issue 7, 1058-1080

Abstract: Aggregate international remittances have been documented to increase as an ex-post response to a disaster, but subtle nuances may be present when looking at household level behaviour. This study paper looks at the response of remittance incidence and levels to a disaster using a natural experiment exploiting the randomness of the path of Typhoon Haiyan, one of the strongest typhoons in Philippine history. We leverage the available 2008–2014 APIS into repeated cross-sections and use a difference-in-differences and event-study approach. Estimates reveal a 3.9 per cent higher remittance incidence but no impact in remittance levels. The positive remittance response is only heterogeneously observable for lower-income households – particularly, third- and fourth-income decile households. We find suggestive evidence that remittance participation is higher with better regional infrastructure and institutions on average, but remittances increase even more so during a crisis when the home region’s infrastructure is deficient. The results paint remittances as an extremely resilient, risk-coping mechanism for households during disasters.

Date: 2025
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DOI: 10.1080/00220388.2025.2453514

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