Labor migration, remittances and economic well-being of households in the Philippines

Labor Migration has long been viewed as a strategy adopted by the household unit to allocate family resources rationally to increase the flows of income and to raise family standard of living. The research reported here examines the extent to which remittances sent by Filipino overseas workers increase the income and standard of living of households in the Philippines. Data for the analysis were obtained from a representative sample of 2,388 households drawn in 1999-2000 from four major "labor sending" areas in the Philippines. The analysis compares households with and without overseas workers to estimate the contribution of remittances to household income and to household standard of living (measured once by an "objective" indicator and once by a "subjective" assessment). The data reveal that due to remittances the income of households with overseas labor migrants is considerably higher than the income of households without overseas workers. The data also reveal that remittances are used mostly for consumption purposes (e.g. purchase of food, clothing, education, and goods) and that most of the difference in standard of living (whether measured on the "objective" or the "subjective" scale) between households with and without overseas workers are attributed to remittances. The implications of labor migration and the policy that encourages and supports labor migration for the Filipino society are evaluated and discussed.