International Migration, Human Capital, and Entrepreneurship: Evidence from Philippine Migrants' Exchange Rate Shocks

By Dean Yang. 2005

290 citations recorded by the source corpus.

Millions of households in developing countries receive financial support from family members working overseas. How do the economic prospects of overseas migrants affect origin-household investments-in particular, in child human capital and household enterprises? Yang examines Philippine households' responses to overseas members' economic shocks. Overseas Filipinos work in dozens of foreign countries which experienced sudden (and heterogeneous) changes in exchange rates due to the 1997 Asian financial crisis. Appreciation of a migrant's currency against the Philippine peso leads to increases in household remittances received from overseas. The estimated elasticity of Philippine peso remittances with respect to the Philippine/foreign exchange rate is 0.60. In addition, these positive income shocks lead to enhanced human capital accumulation and entrepreneurship in origin households. Favorable migrant shocks lead to greater child schooling, reduced child labor, and increased educational expenditure in origin households. More favorable exchange rate shocks also raise hours worked in self-employment and lead to greater entry into relatively capital-intensive enterprises by migrants' origin households.

Subfields: Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/161306b205ffb09ce09ade562fab584afc633236

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Safety Research

In Sociology and Political Science

Citations in the corpus

Migration, School Attainment, and Child Labor: Evidence from Rural Pakistan (2006, background): “…human capital investment in origin communities is small and focused largely on the impact of migration on accumulated schooling (see, for example, Cox Edwards and Ureta (2003), Lopez Cordoba (2004), Yang (2004), Hanson and Woodruff (2003), deBrauw and Giles (2005) and McKenzie and Rapoport (2005)).”
Remittances, migration, and social development (2007, background): “…end up with more educated workers (a brain gain) despite the existence of a brain drain and the “educated unemployment” prevalent in a number of developing countries.25 A recent study in the Philippines shows that educational expenditure in origin households increased with remittances (Yang 2004).”
International Remittances and Human Capital Formation (2014, background): “The empirical evidence is not clear; some studies find that remittances are used for consumption whereas other studies find that remittances are used to acquire investment goods such as education and health (Yang, 2006).”
Remittances, consumption and investment in Ghana (2008, unknown): “For example, Yang (2005) uses panel data from the 1997 Asian currency crisis to analyze how short-term changes in currency rates affect the value of international remittances received by Filipino households.”
The influence of remittances on education and health outcomes: a cross country study (2012, background): “However, this view has changed; more recent studies by Yang (2004) and Adams (2006) have found remittances to be a substantial source of investment spending, particularly in small microenterprises that form the entrepreneurial foundation of many developing countries (Woodruff and Zenteno, 2001).”
Remittances flow and financial development in Bangladesh (2011, background): “Several other studies (Maimbo and Ratha, 2005; Woodruff and Zenteno, 2001; Yang, 2005) suggest a positive relationship between remittances recipient families and entrepreneurship.”
Workers' remittances, economic growth and poverty in developing Asia and the Pacific countries (2007, background): “Firstly, remittances may reduce credit constraint of household receipts so that entrepreneurial activity and private investment could increase (Yang, 2004; Woodruff and Zenteno, 2004).”