International Migration (Yang - Migration Effects Following AFC Exchange Rates!) Flashcards
How many international migrants are there /world population
3% - has been increasing slowly overtime (makes sense as more globalisation)
Desire to migrate - how many want to migrate but have not
13%
We looked at internal migration gains from rural to urban, were positive.
What about international migration
Large wage gains for identical workers AFTER PPP-adjustments (cost of living)
Migration compared to other programs e.g large asset transfer
Gains way larger from migrating than “graduation anti-poverty programs” in India (just giving people money)
Why is migration beneficial for developing countries
Increased financial flows e.g remittances, FDI and portfolio investment contributions
(Eval: brain drain!!! Considered later)
What are developing countries governments doing as a result
And 2 policies that back it up, and how many developing countries have each policy.
Incorporating migration into policymaking
94% have a migration policy agency
88% have government unit dedicated for overseas citizens!
So key chain of reasoning how migration benefits migrant origin countries
Remittances/investing at home can create improve long run benefits!
E.g allow their family to invest in human (education) or physical (investment) capital!
2 possible effects of origin dependent on markets:
If there are no significant market failures, expected effects of migration would be…
B) If markets are missing e.g no credit markets
An increase in consumption and leisure (labour supply to fall). Since markets exist e.g benefits exist if people fail
B) migrants resources can eliminate investment constraints on human and physical capital. Or act as insurance!
Yang: migration from Philippines
How many receive remittances from overseas
25% receive remittances from overseas! So migration big in Philippines
Research design in Yang
It matters where migrants go!
Natural experiment - just observed effect of exchange rates following the Asian financial crisis
It went all over the place, so it mattered where the migrants were! E.g US dollars appreciated hugely, so receive more money! E.g same Filipino in US sending $100 a month, now can get a lot more Philippine pesos!
Findings over the 15 months following the AFC?
On
Remittances
Education spending
Vehicle ownership
Poverty rate
Consumption
Remittances increased 15%
Education spending increased 13% (Human capital investment)
Vehicle ownership increased 27.7%
Poverty rate fell by 16%!
Minimal change in consumption (so more investment based!)
