The Impact of Migration on the Sending Country: Evidence from the Philippines

The Impact of Migration on the Sending Country: Evidence from the Philippines

More than 215 million people—approximately 3% of the world’s population—now live outside their country of birth (United Nations, 2009). Migration of individuals across international borders has socio-economic consequences both to the receiving and sending countries. One of the most important economic impacts of international migration is the amount of remittances sent home by migrants. World Bank (2011) estimated that developing countries received about $372 billion of remittances. Remittances serve as the second largest source of foreign reserves, next to exports of goods and services, for these countries. In addition, remittances benefit the poor households whose average income falls below the amount necessary to meet their most basic and non-food needs for the year.

This study focuses on the roles of international migration and remittances in the Philippines, which was ranked fourth in total international remittances received in 2009, after India, China, and Mexico (World Bank, 2012). The Philippine government refers to the temporary international workers or Overseas Filipino Workers (OFWs) as bagong bayani or new heroes. This epithet stems from the important roles that these migrant workers play: they often serve as the primary income providers for their families left in the Philippines, and their transfers are a source of foreign reserves for the Philippine economy.  

The colloquium presents evidence on three related research questions. The first is whether agricultural households in rural Philippines use remittances from OFWs, along with loans, and assets to mitigate the effect of negative shocks to their income. In particular, speaker Marjorie Pajaron will ask the question whether farmers depend on their network of family and friends when they encounter a natural disaster, like excessive rainfall or typhoon. The second is how migration affects the bargaining power within the household. Finally, she will discuss the remittance behavior of different types of migrants from the Philippines. 

Marjorie Pajaron joins the Walter H. Shorenstein Asia-Pacific Research Center during the 2012–13 academic year from the University of Hawai’i at Manoa Department of Economics where she served as a lecturer.

She took part for five years in the National Transfer Accounts project based in Honolulu. Her research focuses on the role of migrant remittances as a risk-coping mechanism, as well as the importance of bargaining power in the intra-household allocation of remittances in the Philippines. Pajaron received a PhD in economics from the University of Hawai’i at Manoa. 

Her recent working papers include: “Remittances, Informal Loans, and Assets as Risk-Coping Mechanisms: Evidence from Agricultural Households in Rural Philippines,” October 2012, Revise and Resubmit, Journal of Development Economics; “The Roles of Gender and Education on the Intra-household Allocations of Remittances of Filipino Migrant Workers,” June 2012; and “Are Motivations to Remit Altruism, Exchange, or Insurance? Evidence from the Philippines,” December 2011.