March 13, 2018
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Mabini is a small, southern region of the Philippines. As of 2015, its population was of 46,000. By then, 13% of its residents had migrated to Italy.

After the 1997 Asian Financial Crisis, the Philippine peso depreciated and many locals decided to migrate for a better future. Today about 2% of Filipinos work overseas and send back remittances to one quarter of all households in the country. They are present in over 174 countries, with the clear majority being in Saudi Arabia (42%). 

Dean Yang, Professor in the Department of Economics and the Ford School of Public Policy at the University of Michigan, wanted to explore the impact that migrant earnings had on development in origin areas. On March 5th, he presented at the University of Navarra his paper Abundance from Abroad: Migrant Earnings and Economic Development in the Philippines.

“Migrant remittances sent to developing countries amount to about $400 billion a year, which is about at least three times as foreign aid flows”, said Yang. His investigation measures the impact of migrant remittances across 800 municipalities in the Philippines across a two-decade period.

The Asian Financial Crisis resulted in a positive shock to migrant earnings as one unit of foreign currency became more valuable in terms of the Philippine peso. “We mainly look at asset ownership, housing quality, investments in housing and utilities in the households, but also at investments in child schooling and entrepreneurship”, he said. Results are positive on the ownership of durable goods. 

Education also improves. “We see a sustained increase in child schooling, both in elementary years and secondary school”, Yang explained. Overall, the investigation underlines the benefits of improvements in migrant earnings abroad for the development of the origin country.