Distortions in the International Migrant Labor Market: Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks

By David J. McKenzie, C. Theoharides, Dean Yang. Social Science Research Network, 2012

179 citations recorded by the source corpus.

The authors use an original panel dataset of migrant departures from the Philippines to identify the responsiveness of migrant numbers and wages to gross domestic product shocks in destination countries. They find a large significant elasticity of migrant numbers to gross domestic product shocks at destination, but no significant wage response. This is consistent with binding minimum wages for migrant labor. This result implies that labor market imperfections that make international migration attractive also make migrant flows more sensitive to global business cycles. Difference-in-differences analysis of a minimum wage change for maids confirms that minimum wages bind and demand is price sensitive without these distortions.

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Citations in the corpus

Internal Labor Migration as a Shock Coping Strategy: Evidence from a Typhoon (2016, background): “A related literature also investigates similar effects for changes in migrant destination conditions (Yang 2006, 2008b, McKenzie et al. 2014).”
Why Don't Remittances Appear to Affect Growth? (2014, unknown): “The result is that adjustments to rising incomes at destination can take the form of increases in the numbers of temporary migrants, but little change in the wages these migrants earn (McKenzie et al. 2014).”
Multilateral Resistance to Migration (2013, unknown): “This implies that the estimates provided in Beine, Docquier, and Ozden (2011), who assume that the stochastic components of their RUM model follows an Extreme Value Type1 distribution, and in McKenzie, Theoharides, and Yang (2012) can be consistent even if IIA is violated in this specific way.”
Bringing It All Back Home – Return Migration and Fertility Choices (2015, methodology): “Relying on a two-step instrumental variable approach to control for the endogeneity of the migration decisions, we show that return migration has a significant and positive influence on the total number of children.”
Monopsony Power in Migrant Labor Markets: Evidence from the United Arab Emirates (2016, background): “McKenzie, Theoharides, and Yang (2014) find that labor market distortions, in the form of minimum wage requirements, amplify the effect of output shocks on migrant employment. monopsony power in migrant labor markets 1739 tition will lead to higher wages and higher employment for incumbent migrants.”