Asia Health Policy Program working paper # 51
The main goal of this paper is to examine whether natural disasters and the damages they cause contribute to the international migration of Filipino workers. International migration has an important economic effect on the Philippines, which was ranked third in total remittances received (USD 15.3 billion) after India and China in 2015 (World Bank 2016; BSP 2016). The Philippines, being located in the Pacific Ring of Fire and along a typhoon belt, is frequented by natural disasters, which can cause damage to assets and properties, and can potentially displace the population. Extreme weather events have an adverse impact on household welfare, and migration is one of several risk-coping mechanisms households may utilise.
We construct a longitudinal dataset from the Labour Force Survey (LFS 2005–15) at the provincial level and derive different provincial characteristics from seven other sources. Four measures of weather shocks—the frequency of tropical cyclones (by category); the annual frequency of the public storm warning signal (by province); the number of casualties due to a damaging cyclone; and the total amount of damage—are provided by the Philippine Atmospheric Geophysical and Astronomical Services Administration and the National Disaster Risk Reduction and Management Council. The results are robust across different econometric specifications (ordinary least squares, random effects, fixed effects, 2-stage least squares, instrumental variable fixed effects, and instrumental variable random effects), with caveats. First, although weather shocks adversely affect household income, the type and intensity of the tropical cyclone matter. Second, using tropical cyclones and casualties as indicators, weather shocks are good instruments for household income, which is negatively correlated with international migration. Third, almost all measures of weather shocks induce international migration, except the public storm warning signal, whose impact depends on the intensity of the cyclone. Further research might examine whether heterogeneity in the impacts of natural disasters exists across provinces (and to what degree), conditional on different provincial characteristics.
Keywords: Migration, Natural Disaster, Panel Dataset, Instrumental Variables
JEL classification: C33, C36, F22, O15, O18, Q54