Can Filipino Diaspora Lead to Poverty Alleviation? Effect of Migration and Remittances on Poverty in the Philippines
This study investigates the effect of surging increase in international migration and remittances on poverty in the Philippines. We use panel data estimation techniques to control for unobserved regional heterogeneity that affects poverty across 16 regions for the period 1995, 2000 and 2005. We include several dimensions of poverty in the analysis such as incidence, depth and severity of poverty. We used Breusch-Pagan test to check for the presence of heteroskedasticity problem in our data set and Hausman test to evaluate which panel data estimation technique is valid to use. Results suggest using random effects model in empirically analyzing the effect of migration and remittances on poverty. Our estimations are robust to several specifications suggesting strong evidence on the effect of remittances on poverty while the effect of migration on poverty is less apparent. This implies that the volume of cash transfer and not the level of migration matters in alleviating poverty.
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