Distortions in the International Migrant Labor Market:Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks

36 Pages Posted: 20 Apr 2016

See all articles by David J. McKenzie

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Caroline Barclay Theoharides

University of Michigan at Ann Arbor

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

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Date Written: April 1, 2012

Abstract

The authors use an original panel dataset of migrant departures from the Philippines to identify the responsiveness of migrant numbers and wages to gross domestic product shocks in destination countries. They find a large significant elasticity of migrant numbers to gross domestic product shocks at destination, but no significant wage response. This is consistent with binding minimum wages for migrant labor. This result implies that labor market imperfections that make international migration attractive also make migrant flows more sensitive to global business cycles. Difference-in-differences analysis of a minimum wage change for maids confirms that minimum wages bind and demand is price sensitive without these distortions.

Keywords: Labor Markets, Labor Policies, Population Policies, International Migration, Economic Theory & Research

Suggested Citation

McKenzie, David John and Theoharides, Caroline Barclay and Yang, Dean and Yang, Dean, Distortions in the International Migrant Labor Market:Evidence from Filipino Migration and Wage Responses to Destination Country Economic Shocks (April 1, 2012). World Bank Policy Research Working Paper No. 6041, Available at SSRN: https://ssrn.com/abstract=2043469

David John McKenzie (Contact Author)

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