Yang, Dean2012-06-192012-06-192005-04https://hdl.handle.net/10986/8469Millions 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.CC BY 3.0 IGOAGRICULTURECAPITA INCOMECHILD SCHOOLINGCLUSTERSCOMPENSATION OF EMPLOYEESCREDIT CONSTRAINTSDEVALUATIONDURABLE GOODECONOMIC GROWTHECONOMIC MODELSELASTICITYEXCHANGE RATEEXCHANGE RATE CHANGESEXCHANGE RATESFAMILY INCOMEFINANCIAL CRISISFOREIGN CURRENCYFOREIGN CURRENCY EARNINGSGEOGRAPHIC DISPERSIONHOUSEHOLD CHARACTERISTICSHOUSEHOLD HEADHOUSEHOLD INCOMEHOUSEHOLD MEMBERHOUSEHOLD MEMBERSHOUSEHOLD SIZEHOUSEHOLD SURVEYHOUSEHOLD SURVEYSHUMAN CAPITALIMPORTANCE OF REMITTANCESINCOMEINCOME LEVELSINCOME SHOCKINCOME SOURCESINCOMESINCREASE IN REMITTANCESINTERNATIONAL MIGRATIONLIFETIME INCOMELIQUIDITYMIGRANT SAVINGSMIGRANTSMILLION PEOPLENORMAL GOODOVERSEAS MIGRANTSPER CAPITA INCOMEPERMANENT INCOMEPESOSPHILIPPINE PESOSPOSITIVE INCOMEPRODUCTIVE ASSETSPUBLIC POLICYREAL GDPREGRESSION ANALYSISREMITTANCEREMITTANCE RECEIPTSREMITTANCESREPRESENTATIVE SAMPLESMALL BUSINESSSMALL BUSINESS OWNERSHIPSTANDARD ERRORSSURVEY DATAUNEMPLOYMENTUNEMPLOYMENT RATEWAGE RATESWAGESWEIGHTED AVERAGEWorld Bank10.1596/1813-9450-3578