Is Labor Export Good Development Policy?

By

Ernesto M. Pernia

University of the Philippines

SCHOOL OF ECONOMICS

20 October 2008

The paper was presented during the third Ayala Corporation-

UP School of Economics Economic Forum, Makati, 15 October 2008.
 2

Is Labor Export Good Development Policy?

Ernesto M. Pernia1

1. Introduction

“On the highways the people moved like ants and searched for work, for food. And the anger
began to ferment.” (John Steinbeck, The Grapes of Wrath, 1939).

My aim this afternoon is pretty modest. It is to provoke a debate on the pros and cons
of our country’s labor export policy. I thought it’s time to initiate or ratchet up the debate
because we seem to have acquiesced in being a labor exporter. As you would know, the
views on the issue range from hype – “rapid population growth is a good thing because we
can export more labor” – to cynicism – “labor export is just some form of legalized human
trafficking”!
In this forum, we first ask the question: what has made the Philippines specially cut
out to be a labor exporter? Then, we discuss the benefits and costs of international migration
and remittances based on the international and local literature, as well as our own analysis of
the data. In the concluding part, we’ll raise a few questions to mull over in the open forum.
Migration – internal or international – is an age-old human behavior. That it has
accelerated in recent years attests to persisting socioeconomic inequalities across nations,
globalization and demographic structural shifts. Temporary labor migration, with active
government promotion, gained traction in many Asian countries in the 1970s. However, labor
export was generally intended to be a stop-gap measure while governments were trying to
implement policy reform to whip their economies into shape. Indeed, labor export as policy
has largely faded in many of our Asian neighbors but remains a major development policy
plank in our country.
We argue that the Philippines appears to have been specially suited as a labor exporter
owing mainly to twin policy failures that are by now stylized facts. On the one hand, unlike
the other East and Southeast Asian economies, the Philippines failed to graduate in a timely
manner from its post-war import-substitution industrialization policy toward export
promotion and economic liberalization. On the other hand, while it was among the first in
Asia to adopt a population policy in 1969, it failed to sustain the policy that is practically nil
today and continues to hang in the balance in Congress. On the former policy mistake, it’s
probably reasonable to add that protectionism – which had among its policy instruments
exchange and import controls, tax incentives, tariff structure and selective credit to preferred
industries – helped nurture the culture of corruption that appears to be going berserk today.
The consequences of the policy mistakes are well-known, namely, weak long-term
economic performance in the face of robust growth of population and labor force. (I hastened
to add the corruption angle here because of the remark from some quarters that our
1
Professor of Economics, University of the Philippines, Diliman, Quezon City 1101. The paper was presented
at third Ayala Corporation-UP School of Economics Economic Forum, Makati, 15 October 2008.
 3

backwardness is due to corruption – which I completely agree with – and that rapid
population growth is a non-issue – which I strongly dispute.) Figure 1 shows the country’s (a)
real GDP growth rate year-to-year that appears in a roller-coaster pattern, (b) long-run
(“natural”) GDP growth rate over the period 1970-2006 that looks virtually flat at about 4.0%
throughout, and (c) population growth rate over the same period that diminishes slowly from
3.0% to 2.1%. The difference between the upper and the lower broken lines is of course the
long-run average (“natural”) GDP per capita growth rate of 1.45% over the three-and-a-half
decades. Unimpressive! Muddling through seems to be what we’ve been used to, like the
wanton debauchery of our institutions that we seem to be getting accustomed to .
If we take a longer-term view, 1951-2006 (Figure 2), the picture is even more
disconcerting as average GDP per capita growth had been on the downtrend, as economic
performance was better in the 50s through the 60s.
Figure 1

The next four graphs (Figures 3-6) compare the Philippines’ real GDP per capita
long-term trend with some of its Asian neighbors from 1950 to 2003. Figure 3 shows
Malaysia parting ways with the Philippines as early as the early 70s. Figure 4 shows that
Thailand caught up with the Philippines in the early 80s and said bye-bye thereafter. Figure 5
shows Indonesia and the Philippines intersecting in the early 90s, and finally Figure 6
presents China zooming past the Philippines in the latter part of the 90s.
2. Export of Labor as Policy
The Philippine government’s policy to promote overseas employment began with President
Marcos’ PD 442, known as the Labor Code of 1974. This aimed to ensure “the careful
selection of Filipino workers for the overseas labor market to protect the good name of the
Philippines abroad.” Labor export was given further impetus in June 1978 with Presidential
Decree (PD) 1412, in which Article 12 says: “It is state policy to strengthen the network of
 4

public employment offices and rationalize the participation of the private sector in the
recruitment and placement of workers, locally and overseas, to serve national development
objectives”. Thus were created the Overseas Employment Development Board (OEDB) and
the Office of Emigrant Affairs (later the Commission on Filipinos Overseas), which were
charged with the promotion, development, and regulation of Filipino overseas employment.
In March 1982, the President issued Executive Order (EO) 797 that reorganised the Ministry
of Labor and Employment and created the POEA, which assumed the functions of the OEDB
and the National Seamen Board.
In March 1991, President Corazon C. Aquino issued EO 450 lifting the ban on new
applications for recruitment agencies, [earlier suspended by President Marcos’ LOI 1190], to
take advantage of new markets for Filipino labor, opening the recruitment market to new
players and competition, and potentially increasing the inflows of “much needed” foreign
exchange.
In recent years, there has been much hype about the surge in remittances. It has
boosted the peso, eased the debt burden, tamed inflation, and contributed in general to a rosy
picture of the economy. These positive outcomes have encouraged the government to push
further the policy of labor export, highlighted by President Gloria Macapagal-Arroyo’s
creative idea announced early last year that the country should develop “super-maids” for
employment in the advanced countries. Tuesday last week, she promoted OFWs to the status
of Filipino “expats”!
 5

3. Migration
Because international migrants typically are among the better educated and experienced
workers in the home country, their departure often results in a disruption of economic
activity. And even when the vacancies are filled, the situation may not be the same as before,
as reflected in the quality of goods and services. A deterioration in quality would not be
 6

unusual, as is apparent in the quality of education and health services in the Philippines
owing to the departure of highly trained teachers and health workers. For instance, health
indicators are now lagging behind the Southeast Asian average despite the fact that the
 7

Philippines leads in the training of health professionals.2 However, the deterioration could
also be partly due to diminished real budgets for social services (Manasan 2004) owing to the
country’s less than impressive economic growth and fiscal deficits.
Concerning the brain drain issue, some studies (e.g., Adams 2003) find that
international legal migration is largely the movement of educated persons, with the large
majority of those moving to the United States and other OECD countries having secondary
schooling or higher. However, they claim that although migrants are well educated,
international migration does not take away a very large share of a country’s best educated (in
general, less than 10% of the college-educated or higher). Nonetheless, these studies admit
that for a few labor-sending countries, international migration does result in brain drain.
Indeed, other authors argue that international migration leads to a significant loss of
highly educated persons for a wide range of countries (Lowell 2002; Lucas 2005). Tan (2007)
notes that, in the case of the Philippines, there is a creaming off of highly skilled nurses and
blue-collar workers; to the extent that the education-training system is unable to produce
comparable replacements, at least in the short to medium term, brain drain ensues.
In general, however, the losses to labor-exporting developing countries are not exactly
easy to quantify. One aspect is the loss of public funds invested in the education and training
of those who migrate, particularly permanent emigrants, which is a good argument for the
need to reform the financing of tertiary education. Still and all, it can be argued that the brain
drain is probably not an unmitigated bane as there are compensating benefits, such as
remittances, other beneficial links that the emigrants maintain with the home country, as well
as return migration.3 A World Bank study analyzing cross-country data (Adams and Page
2005) shows that international migration exerts a strong negative effect on poverty. For
example, a 10% rise in the share of international migrants in a country’s population is
associated with a 1.9% decline in the proportion of the population living below a US dollar-a-
day poverty line.

4. Psychosocial Costs of Migration

While the economic costs and benefits of labor migration are relatively well known, this does
not seem to be true of the psychosocial costs to migrants and their families. One early study
(Fasick 1967) finds that the children of migratory agricultural workers in the United States
suffer from severe educational retardation as they have to substitute for the work of their
absent parents. Similarly, a Mexican study (McKenzie 2006) points out some unfavorable
effects of migration, such as on child care (less breastfeeding and uncompleted schedule of
vaccines). Another Mexican study (Aguilera-Guzman et al. 2004) notes that the children of
migrants are more susceptible to such problems as drug abuse and absenteeism or dropping
out of school. A Caribbean study (Crawford-Brown and Rattray, 2002) finds that children left

2
For example, while infant mortality rate had dropped to 29 per thousand in 2001, it is higher than in Malaysia
and Thailand; moreover, as much as 40% of women deliver babies without an attending physician, nurse or
midwife.
3
Good examples are the Chinese and Indian diasporas that are playing an important role in the continuing rise
of FDIs into China and India. Likewise, both countries are experiencing return migration, either permanent or
circular.
 8

behind are likely to suffer from such emotional and psychological problems as depression,
withdrawal, and running-away behaviour due to the lack of parental contact and supervision.
A Philippine study (Scalabrini Migration Center 2005) notes that the separation of
parents due to migration often results in family breakdown. Apart from the psychosocial
disadvantages that befall the children, OFWs themselves have to bear various psychosocial
costs in their work places. Other studies report that with the feminization of migration, female
OFWs, in particular, in various parts of the world are subjected to violence and abuses
(Estopace 2002). Women hired as domestic helpers and entertainers are especially exposed to
serious hazards to health and life, including sexual harassment and exploitation, rape, and
sexually transmitted diseases and HIV/AIDS (Asis et al. 2005).

5. Remittances
Remittances to developing countries are reported to have risen more than fivefold from US
$30 billion in 1990 to $170 billion in 2005 (World Bank 2006). The Philippines is reputed to
be the world’s fourth highest remittance recipient country after India, China, and Mexico. As
you know, in 2006, remittances were officially recorded at US$12.8 billion – up 20% from
the preceding year – and totalled $14.4 billion by the end of 2007. By end 2008, the figure
could hit roughly $16 billion, representing more than 10% of GDP – the highest among the
four countries.
The same World Bank cross-country analysis (Adams and Page 2005) cited above
finds that the level of international remittances is significantly associated with poverty
reduction. On the average, a 10% increase in the share of remittances in a country’s GDP is
associated with a 1.6% drop in poverty incidence.
In general, however, since labor migrants tend to come from the not-so-poor
households, it is the lower-middle to middle-income families who directly gain from
remittances. Indeed, a fairly large Latin American study (Acosta et al. 2007) covering 11
countries finds that the proportion of remittance recipient households who are poor varies
considerably across countries. Only in some countries are remittance recipients
predominantly poor, as in Mexico and Paraguay where 61% and 42% of recipient
households, respectively, belong to the poorest income quintile. The poorer households could
benefit from remittances mainly in subsequent rounds via multiplier effects from increased
consumption and investment spending. The size of the multiplier effect may hinge on
whether remittances are received by rural or urban households, with the former typically
consuming more local products, thereby creating a larger multiplier effect (Adelman and
Taylor 1990).
The same Latin American study finds that remittances appear to lower poverty levels
although the impact varies across countries and, on balance, tends to be modest.4 A study on
Guatemala (Adams 2006) shows that internal or domestic remittances tend to reduce poverty
somewhat more than do international remittances. Another study on Lesotho (Gustafsson and
Makonnen 1993) finds that if not for remittances 11-14% more households would fall below
the poverty line.

4
The Latin American countries include Bolivia, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico,
Nicaragua, Paraguay, Peru, and the Dominican Republic.
 9

A Philippine study (Sawada and Estudillo 2006) reports a similar outcome for the
Philippines as remittances represent an income transfer to poor households and an increase in
gifts to other households. However, other Philippine authors (Rodriguez 1998; Tullao, Cortes
and See 2007) observe that remittances result in higher income inequality as they tend to
benefit more the higher income deciles.
Researchers on other countries argue that the inequality effect is not straightforward.
Some (Chimhowu, Piesse and Pinder 2005) observe that remittances increase inequality and
social differentiation between recipient and non-recipient households. Others (Carling 2005),
on the other hand, claim that migration and remittances would initially worsen inequality
when migration costs are high but would eventually improve it as lower-income households
are able to afford the lower migration costs. The consensus seems to be that the effect of
remittances on inequality depends on the opportunities for migration.
One curious issue is the extent to which family members in remittance recipient
households reduce their work effort – a moral hazard effect on labor supply. There is
evidence of a decline in labor force participation among remittance recipients – more among
females than males – in El Salvador (Acosta 2007) and in the Philippines (Rodriguez and
Tiongson 2001; Tullao, Cortes and See 2007), with the gender effect depending on whether
the wife or the husband is the recipient (Cabigen 2006). But this appears to be matched by an
increase in entrepreneurial activities, such as microenterprises for women and self-
employment for men (Acosta 2007; Yang 2004; Rozelle, Taylor and DeBraw 1999).
The extent to which remittances are spent on consumption or on investment continues
to be a debated issue. But remittances are a fungible resource to the recipient household.
Hence, the issue is not whether the money received is actually invested but whether
households whose incomes are increased by remittances save more and such savings become
available for investment in the local or macro economy. One author (Adams 2006) finds that
households receiving internal and international remittances in Guatemala spend less of their
incremental income on consumption than do households without remittances. Another author
(Mansuri 2007) finds that in Pakistan households with return migrants invest significantly
more compared with non-migrant households and those whose migrant members are still
working abroad.
Expenditures on education, housing and land are, of course, also important forms of
investment.5 A Pakistani study (Mansuri 2007) observes that remittances have a positive and
significant effect on child education and health, with a gender-equalizing effect as the gains
for girls are appreciably greater than those for boys. Moreover, with better access to
schooling, children in remittance recipient households tend to work substantially fewer hours.
In Latin America overall, the effect of remittances on the educational attainment of
children is generally restricted to children with low levels of parental schooling. In El
Salvador, remittances prolong a child’s education (Edward and Ureta 2001). As to health
outcomes, in Guatemala and Nicaragua remittances positively affect children’s health,
especially in poor households.

5
These investments reflect a rational behavior on the part of the family particularly when the investment climate
is unfavorable or other investment vehicles are not readily available.
 10

A study on the Philippines (Yang 2004) finds that households, whose overseas
workers experienced favorable exchange-rate shocks (during the Asian financial crisis), were
able to reduce child labor, increase educational spending, improve child schooling, and afford
higher ownership of durable goods. Another Philippine study (Tullao, Cortes and See 2007)
notes that remittances lead to higher human capital investment (education and health).
At the regional level in the Philippines, the more developed regions send more OFWs
than the less developed ones, resulting in appreciably greater shares of total remittances going
to the former (Pernia 2006). However, OFWs from the poorer regions tend to remit home
bigger average amounts than those from the richer regions. Thus, while remittances may
contribute to a widening of the economic disparities across regions, they appear to lift the
well-being of poor households even in the lagging regions.
At the macroeconomic level, remittances have greatly helped alleviate fiscal deficits,
external debts, trade imbalances, and scant foreign direct investment in developing countries.
Foreign exchange inflows, however, often exert upward pressure on prices, requiring skillful
monetary management although in the Philippines with its dependence on imports, the effect
on prices appears to have been the opposite. Moreover, these inflows may spur a real
appreciation of the exchange rate, thereby constraining the development of export-oriented
and import-competing industries.
This phenomenon has been likened to the “Dutch disease” problem of Indonesia
brought about by the boom in oil exports income, as observed for a number of Asian
countries (Quibria 1986), El Salvador (Acosta, Lartey and Mandelman 2007), Jamaica
(Bussolo and Medvedev 2007), and Latin America in general (Lopez, Molina and Bussolo
2007). Further, the remittance windfall may have a moral hazard effect as the government
softens in pursuing policy reform or improved governance while people are lulled into
complacency, as appears to be happening in the Philippines.

6. Analysis of Philippine Data (2000, 2003 and 2006)

6.1 International remittances and domestic incomes
The mean remittance amount received by households increases monotonically with income
quintile and consistently over time (2000, 2003, and 2006). Thus, the positive effect of
remittances on household incomes also rises monotonically from about 1.4% for the lowest
quintile to 5% for the middle quintile and around 15% for the top quintile, as shown
graphically in Figure 7.
 11

Figure 7. Percentage change in household income due

to remittance by quintile (all households), 2000-2006

If we consider remittance-receiving households only, the poorest quintile has the

lowest share (4-7%) of households receiving remittances and this goes up consistently to 36-
45% for the richest quintile. The impact of remittances on household incomes is indeed larger
for all income groups but still greater for the upper quintiles than for the lower ones, rising
from 35% for the first quintile to 49 % for the fifth in 2000. In 2003 and 2006, the effect of
remittances appears more muted for all quintiles but still rising steadily from about 20% for
the poorest to 35-45% for the richest, as shown in Figure 8. (Note that the numbers on the
vertical axis are much bigger in Figure 8 than in Figure 7.)

Figure 8. Percentage change in household income

due to remittance by quintile
(households with remittance), 2000-2006

A Mexican study (Latapi and Janssen 2006) finds that while the mean remittance
amount also increases with income quintile for remittance-receiving households, as in the
Philippines, remittances raise by 426% the household incomes of the poorest quintile,
dropping monotonically to 30% for the richest quintile. The substantial positive impact of
remittances on the poorest in Mexico can be explained by the fact that as much as 61% of all
 12

households receiving remittances fall in the bottom quintile, the highest in Latin America,
followed by Paraguay at 42%. This is not the case in the Philippines where larger proportions
of remittance recipient households belong to the upper income groups and only around 5%
are in the bottom quintile.
6.1.1 Remittances adjusted for foregone domestic earnings
The welfare-enhancing effect of remittances shown above may be overstated as it does not
consider the counterfactual, namely, what if the migrant, who was earning prior to leaving,
had stayed home? This means that household total income sans remittance would be reduced
by the departure of the migrant.6 The adjustment reveals that the effect of remittances on
household incomes is much more modest. Worse, the adjusted with-remittance incomes for
the first and the second quintiles are reduced by 12% and 4%, respectively, in 2006 though
less so in 2003, as Figure 9 shows.7 Still, the welfare-enhancing effect of remittances rises
consistently with income quintile.

Figure 9. Percentage change in household income

adjusted for domestic earnings foregone due to migration
(households with remittance), 2000-2006

6.2 Remittances and poverty reduction

The analysis can also done in terms of how remittances matter to poverty reduction. In the
absence of remittances, there would have been more than 26 million persons (or 33.3% of the
total population), considered poor in 2003 (according to the official definition of poverty)
belonging predominantly to the first two quintiles. In 2006, the corresponding numbers were
more than 30 million persons (or 36% of the total population). But with remittances, poverty
headcount was lower at 24 million and poverty incidence at 30% in 2003, and in 2006, 27
million and 32%, respectively. In other words, remittances helped reduce poverty by 2-3
million persons. Still, poverty incidence was only slightly reduced for the first two quintiles
but practically wiped out for the upper quintiles.

6
Mean non-remittance income per capita seems like a reasonable proxy for migrants’ average foregone
domestic earnings as, in all likelihood, not all migrants were employed prior to departure for such reasons as
over-qualification for available jobs, discouraged worker phenomenon, preoccupation with departure plans, etc.
7
Perhaps, due to the assumption that at least one household member was earning average income prior to
departure which may not be true of the first and second quintiles.
 13

On the whole, the poor appear to benefit from remittances but only modestly
compared with the richer households. Given that bigger proportions of the upper income
groups receive remittances and, indeed, greater average amounts, the beneficial effect of
remittances is skewed in their favor. A similar modest effect is reported in Latin America,
except in Mexico and Paraguay where large proportions of remittance-receiving households
belong to the bottom quintile.
6.3 Internal remittances
Apart from international remittances, households do benefit from internal (or domestic)
remittances as well. The data show that the proportion of households receiving internal
remittances is highest for the bottom quintile at 43-56% for 2000 and 2006, respectively, and
declines consistently to 20-31% for the top income group. And while the average remittance
amount still increases monotonically with income quintile, the effect on household incomes is
the reverse that of the international remittances: it is strongest for the poorest at 17-22%,
dropping also consistently to about 8% for the richest, as portrayed in Figure 10.
It thus appears that internal remittances are, at the margin, both more welfare-
enhancing for the lower quintiles and inequality-improving than are international remittances,
which is consistent with the finding for Guatemala (Adams 2006). This is attributable to the
fact that a good deal of internal migration is made up of rural-urban migrants who may work
in lowly occupations (e.g., domestic help) but are nonetheless the principal sources of support
to poor households in rural areas.

Figure 10. Percentage change in household income due to domestic

remittance (households with domestic remittance), 2000-2006

7. Econometric Analysis
7.1 Remittances, household incomes, and poverty
To enhance the descriptive analysis, we carried out econometric analysis to address the
question: to what extent can remittances raise household incomes and alleviate poverty, and
influence investment in human capital, labor force participation and household saving,
controlling for the confounding influence of other variables? The procedure is discussed at
length in the main paper. Here, we present the main results.
 14

The effect of remittances on household incomes is positive and highly significant,

controlling for the education of household head, dependency ratio, and the income class of
the province of residence. Further, our analysis shows that the share of remittances in
household income raises the likelihood of a household getting out of poverty, other things
being equal.
Remittances also strongly influence education spending per school-age child,
controlling for non-remittance income besides the other variables. Similar results are revealed
in the case of health care expenditure per household member. To illustrate, remittance-
receiving households are able to spend 1,788 pesos more for education per child compared
with households that do not get remittances; the corresponding incremental amount for health
care is 668 pesos per household member.
Other things being equal, remittances appear to exert a negative effect on the share of
employed persons in the household. This negative effect on total household work effort may
be interpreted as a complacency effect, as also reported by earlier studies on El Salvador
(Acosta 2007) and on the Philippines by other authors (Rodriguez and Tiongson 2001;
Tullao, Cortes and See 2007). Alternatively, it may be that children, who used to work, stop
working as remittances enable them to go to school.
Further, remittances, ceteris paribus, appear to have a positive and significant effect
on household saving behaviour.
7.2 Remittances and regional development
The question whether remittances contribute to development at the local or community level
can be examined through analysis of regional data. Based on the literature review, the
hypothesis is that remittances benefit not only the recipient households directly but also the
non-recipient households in the local economy via the multiplier effects of increased
spending by remittance-recipient households.
Our analysis shows that remittances have a positive and significant effect on the well-
being of poor households, as reflected in higher family spending per capita of the poorest
40% of households, controlling for the effects of other variables. To illustrate, an increase of
P1,000 in remittance per capita results in P1,789 additional annual family spending per
person among the poorest quintile. Roads, education, and health also appear to be particularly
important factors that improve the poor’s welfare; by contrast, overall increases in GRDP per
capita (or regional development per se) do not seem to matter to the poor’s well-being.
Remittances appear to contribute significantly to regional development through
increased spending for consumption, human capital and housing investments, and consequent
multiplier effects. However, because the more advanced regions tend to get bigger shares of
the total, remittances may contribute to regional divergence rather than convergence (Go
2002; Pernia 2006). As expected, roads, water, education and health infrastructures are
critical to regional development.
Does the positive impact of remittances on expenditures or incomes of the poor in the
regions mean poor people getting out of poverty? Consistent with the results discussed above,
the answer is yes. To illustrate, a 10% increase in the share of remittances in household
income is associated with a 2.6% rise in the proportion lifted out of poverty, controlling for
other variables (such as education and health).
 15

8. Conclusion and Policy Implications

We took off from the premise that the Philippines appears to be stuck as a labor exporter
owing mainly to twin policy mistakes: (i) a long-lived import-substitution industrialization
policy, whose protectionist policy instruments probably helped nurture the culture of
corruption that has permeated the social fabric, and (ii) a short-lived population policy. The
consequence, of course, has essentially been and continues to be too many Filipino workers
chasing too few jobs in the domestic economy.
On the whole, international remittances appear to have greatly helped Philippine
households and communities muddle through over the past three decades or so. However, it
seems that labor export cannot be relied upon as a policy for reducing poverty, redressing
income inequality and, for that matter, fostering the country’s long-run development. If it
could, why has the country just been muddling through for the past three decades or so? In
the coming years, as the global labor market demands higher-level professional and technical
workers, and to the extent that -- rather, if – labor supply can respond, remittances could
result in persisting social inequality. We should realize, though, that our human capital
industry has its limits.
Likewise, although remittances seem to have greatly benefited the macro-economy in
terms of its external current account, debt service, and some unemployment relief, the
remittance bonanza appears to have made it convenient for the government to shirk difficult
policy reforms. Other Asian countries, such as South Korea, Taiwan and Thailand, that
adopted labor export as a temporary measure pursued policy reforms directed at both the
labor demand and supply sides, enabling their economies to move up to rapid and sustained
growth paths.
Migration is arguably causing brain drain, not to mention the psychosocial costs
borne by the migrants themselves and their families left behind. It seems obvious that
continued reliance on labor export is bound to further compromise, the country’s human
capital requirements for long-term development.
Is the export of labor sustainable? Are we content with the “blue-collar” business of
exporting labor? If we are, what needs to be done to stretch the limits of our human capital
industry? If we are not content, what’s the alternative? In general, is there a need to rethink
our country’s labor export policy?
We should perhaps demand that those aspiring to be the next President be made to
convincingly respond to these and related questions.
Thank you!
 16

References

Acosta, Pablo. 2007. “Entrepreneurship, Labor Markets, and International Remittances:

Evidence from El Salvador.” In C. Ozden and M. Schiff (eds.), International Migration,
Economic Development & Policy (World Bank and Palgrave Macmillan), pp. 141-159.

__________, P. Fajnzylber, and J. H. Lopez. 2007. “The Impact of Remittances on Poverty

and Human Capital: Evidence from Latin American Household Surveys.” In C. Ozden and
M. Schiff (eds.), International Migration, Economic Development & Policy (World Bank and
Palgrave Macmillan), pp. 59-98.

Adams, Richard H. 2003. “International Migration, Remittances and the Brain Drain: A
Study of 24 Labor-Exporting Countries.” World Bank Policy Research Working Paper 3069,
Washington, D.C.

__________. 2006. “Remitttances, Poverty, and Investment in Guatemala.” In C. Ozden and

M. Schiff (eds.), International Migration, Remittances & the Brain Drain (World Bank and
Palgrave Macmillan), pp. 53-80.

Adams, R. and J. Page. 2005. “Do International Migration and Remittances Reduce Poverty
in Developing Countries?” World Development 33(10): 1645-1669.

Aguilera-Guzman, R. M., et al. 2004. “Paternal Absence and International Migration:

Stressors and Compensators Associated with the Mental Health of Mexican Teenagers of
Rural Origin.” Adolescence 39(156): 711-723.

Asis, Maruja M.B., et al. 2005. “When the Light of the Home is Abroad: Unskilled Female
Migration and the Filipino Family.” Singapore Journal of Tropical Geography 25 (2).

Balisacan, Arsenio M., and E. M. Pernia. 2003. “Poverty, Inequality, and Growth in the
Philippines,” in E. M. Pernia and A. B. Deolalikar (eds), Poverty, Growth, and Institutions in
Developing Asia (London: Palgrave Macmillan), pp. 219-246.

Bussolo, M., and D. Medvedev. 2007. “Do Remittances Have a Flip-Side? A General
Equilibrium Analysis of Remittances, Labor Supply Responses, and Policy Options for
Jamaica.” Working Paper 4143, World Bank.

Cabigen, Emily. 2006. “The Effect of Filipino Overseas Migration on the Non-Migrant
Spouse’s Market Participation and Labor Supply Behavior,” IZA DP No. 2240.

Carling, J. 2005. “Migrant remittances and development cooperation.” PRIO Report I/2005,
International Peace Research Institute.

Chimhowu, A., J. Piesse, and C. Pinder. 2003. “Assessing the Impact of Migrant Workers’
Remittances on Poverty.” Presented at the EDIAS Conference organised by Institute for
Development Policy and Management and Women in Sustainable Enterprise, 24-25
November, Manchester, UK.
 17

Crawford-Brown C., and Rattray, J. M. 2002. “Parent-child Relationships in Caribbean

Families.” In N. Boyd Webb and D. Lum (eds), Culturally Diverse Parent-Child and Family
Relationships. New York: Columbia University Press, pp.107-130.

Edward, A., and M. Ureta. 2001. “Income Transfers and Children’s Schooling: Evicence
from El Salvador.” Working Paper, California State University at Long Beach.

Estopace, Dennis. 2002. “Issues and Concerns on Labor Migration in the Philippines: Inputs
for Media Reportage.” Paper presented at the Discussion-Workshop on Migration Journalism
in the Philippines, Manila, December 7.
Fasick, F. 1967. “Educational Retardation among Children of Migratory Agricultural
Workers.” Rural Sociology 32(4): 399-413.

Go, Stella. 2002. “Migration, Poverty and Inequality: The Case of the Philippines.” Paper
presented at the 2002 Conference of the Asia-Pacific Migration Research Network, Fiji.

Gustafsson, J., and N. Makkonen. 1993. “Poverty and Remittances in Lesotho.” Journal of
African Economies 2(1): 49-73.

Latapi, Agustin Escobar, and E. Janssen. 2006. “Migration, the Diaspora and Development:
The Case of Mexico.” International Institute for Labour Studies Discussion Paper 167/2006,
International Labour Office, Geneva.

Lopez, H., L. Molina, and M. Bussolo. 2007. “Remittances and the Real Exchange Rate.”
Working Paper 4213. World Bank.

Lowell, B. Lindsay. 2002. “Skilled Labour Migration from Developing Countries: Annotated
Bibliography.” International Migration Papers, International Labour Office, Geneva.

Manasan, Rosario G. 2004 “The Philippine’s Fiscal Position: Looking at the Complete
Picture”. Philippine Institute for Development Studies (PIDS). Makati.

Mansuri, Ghazala. 2007. “Does Work Migration Spur Investment in Origin Communities?
Entrepreneurship, Schooling, and Child Health in Rural Pakistan.” In C. Ozden and M. Schiff
(eds.), International Migration, Economic Development & Policy (World Bank and Palgrave
Macmillan), pp. 99-140.

McKenzie, David J. 2006. “Beyond Remittances: The Effects of Migration on Mexican

Households.” In C. Ozden and M. Schiff (eds.), International Migration, Remittances & the
Brain Drain (World Bank and Palgrave Macmillan), pp. 123-147.

Pernia, Ernesto M., and J. M. Ian S. Salas. 2005. “Investment Climate, Productivity, and
Regional Development in a Developing Country.” Asian Development Review 23 (2): 70-89.

___________. 2006. “Diaspora, Remittances, and Poverty in RP’s Regions.” Discussion

Paper No. 0602, U.P. School of Economics (July).

Quibria, M. G. 1986. “Migrant Workers and Remittances: Issues for Asian Developing
Countries.” Asian Development Review 4 (1): 78-99.
 18

Rodriguez, E. 1998. “International Migration and Income Distribution in the Philippines.”

Economic Development and Cultural Change 48(2): 329-350.

___________, and E. Tiongson 2001. “Temporary Migration Overseas and Household Labor
Supply: Evidence from the Philippines.” International Migration Review 35(3): 709-725.

Sawada, Y., and J. Estudillo. 2006. “Trade, Migration and Poverty Reduction in a
Globalizing Economy,” UN-Wider Research Paper No. 2006/58.

Scalabrini Migration Center. 2005. Hearts Apart: Migration in the Eyes of Filipino Children.
Quezon City.

Smith, A., Lalonde, R., and Johnson, S. 2004. “Serial Migration and its Implications for the
Parent-Child Relationship: A Retrospective Analysis of the Experiences of the Children of
Caribbean Immigrants.” Cultural Diversity and Ethnic Minority Psychology 10: 107-122.

Suarez-Orozco, C., Todorova, I., and Louie, J. 2002). “Making Up for Lost Time: The
Experience of Separation and Reunification among Immigrant Families.” Family Process 41:
625-643.

Tan, Edita A. 2007. “The Private and Social Returns to Migration.” Draft, U. P. School of
Economics.

Tullao Jr., T, M. A. Cortes, and E. See. 2007. "The Economic Impacts of International
Migration: A Case Study on the Philippines." Center for Business and Economics Research
and Development, De La Salle University- Manila, Philippines.

World Bank. 2006. Global Economic Prospects: Economic Implications of Remittances and
Migration (Washington, D.C.:World Bank).

Yang, Dean. 2004. “International Migration, Human Capital, and Entrepreneurship: Evidence
from Philippine Migrants’ Exchange Rate Shocks.” Gerald R. Ford School of Public Policy
and Department of Economics, University of Michigan, Ann Arbor.