Abundance from Abroad: Migrant Income and Long-Run Economic Development

Gaurav Khanna, Emir Murathanoglu, Caroline Theoharides and Dean Yang

American Economic Review, 2026, vol. 116, issue 4, 1540-77

Abstract: We study how international migrant income prospects affect long-run development in origin areas. We leverage the 1997 Asian Financial Crisis exchange rate shocks in a shift-share identification strategy across Philippine provinces. Initial migrant income shocks are magnified six-fold over time, increasing domestic income, education levels, migrant skills, and high-skilled migration. Remarkably, 74.9 percent of long-run income gains come from domestic rather than migrant income. Trade driven impacts of exchange rate shocks are orthogonal to effects via migrant income. A structural model reveals that 19.7 percent of long-run income gains stem from educational investments. International migration fosters broad economic development in origin communities.

JEL-codes: F22 F31 G01 J24 J82 O15 O16 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1257/aer.20241465

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