Migration, Remittances and Poverty
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Migration, Remittances and Poverty : Evidence from the Community-Based Monitoring System (CBMS) Data in Selected Communities in the Philippines. ALELLIE B. SOBREVIÑAS GERM ÁN CALFAT Arnoldshain Seminar XI: “Migration, Development and Demographic Change- Problems, Consequences, Solutions”

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Alellie b sobrevi as germ n calfat

Migration, Remittances and Poverty: Evidence from the Community-Based Monitoring System (CBMS) Data in Selected Communities in the Philippines

ALELLIE B. SOBREVIÑAS

  • GERMÁN CALFAT

    Arnoldshain Seminar XI: “Migration, Development and Demographic Change- Problems, Consequences, Solutions”

    University of Antwerp

    28 June 2013


Outline

OUTLINE

Introduction

Data and Methods

Empirical Results

Concluding Remarks

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction

1. INTRODUCTION

Trend in stock of Filipinos Overseas, 2005-2011

Source: Commission on Filipinos Overseas

  • The stock of Filipinos overseas is about 10.5 million in 2011 - more than 10% of the country’s total population

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction1

1. INTRODUCTION

Global Mapping of Filipinos Overseas

Source: Commission on Filipinos Overseas

  • Majority of the Filipino migrants go to more developed countries

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction2

1. INTRODUCTION

Source: BangkoSentralngPilipinas

  • The volume of cash remittances continued to increase since 2005 and reached US$21.4 billion in 2012 (about 6.5% of GNI)

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction3

1. INTRODUCTION

  • Continuous increase in the number of deployed OFWs in recent years

    • Increased by 69.6% in 2012 when compared to 2006 figures (POEA, 2013)

  • No significant reduction in poverty rates

    • Poverty incidence (1st semester, 2012) = 27.9% (0.9 percentage point lower compared to 2006 estimates) (NSCB, 2013)

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction4

1. INTRODUCTION

  • Remittances may not necessarily flow to the poor

  • Remittance-recipient households have more education (Adams, 2004)

  • Better-off households are more capable of producing migrants (Stahl, 1982)

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction5

1. INTRODUCTION

  • Economy’s growth may be restricted => “brain drain”

  • Social tensions may arise => if income inequality increases between migrant and non-migrant households.

  • There may be costs to family members left behind, especially the children

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction6

1. INTRODUCTION

  • Existing research on poverty and migration/remittances

  • limited

  • no consensus in the literature with regards to the impact of migration/remittances on poverty

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction7

1. INTRODUCTION

  • Conceptual and Empirical Challenges

  • endogeneity

  • reverse causality

  • selection bias

  • Possible solutions

  • randomized experiment (e.g., lottery system)

  • panel data

  • instrumental variables

  • Heckman selection model

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


1 introduction8

1. INTRODUCTION

  • Counterfactual income approach

  • first used by Adams (1989) – the regression of incomes of non-migrant HHs was estimated and then, the resulting parameters were used to estimate the counterfactual income of migrant HHs

  • also used and refined by other researchers

  • Rodriguez(1998) – assumed that the differences between households with and without migrants are observable and can be reduced in a constant term

  • Barham and Boucher (1998) – added a stochastic term component to predicted incomes; migration choice and labor-force participation

  • Acosta, et al. (2007) – used bootstrap prediction

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


2 data and methods

2. DATA AND METHODS

  • Community-based Monitoring System (CBMS)

  • an organized process of data collection, processing and validating information at the local level, and integration of data in the local development process

  • one of the tools developed in the early 1990s to provide policymakers with a good information base for tracking the impacts of economic reforms and policy shocks on the vulnerable groups in the society

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


2 data and methods1

2. DATA AND METHODS

  • Community-based Monitoring System (CBMS)

  • promotes evidence-based policymaking and program implementation while empowering communities to participate in the process.

  • entails the development of instruments and conduct of training to build the capacities of local stakeholders in implementing the system.

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


Key features of cbms

Key Features of CBMS

  • It is a census of all households in the community and not a sample survey

  • It is rooted in local government and promotes community participation.

  • It uses local personnel and community volunteers as monitors

  • It establishes databases at each geopolitical level. It uses freeware customized for CBMS-data encoding, processing and poverty mapping.

  • It generates a core set of indicators that are being measured to determine the welfare status of the population. These indicators capture the multidimensional aspects of poverty.


Cbms core indicators

CBMS Core Indicators

CBMS IndicatorsDimensions of PovertyCore Indicators

1. Child deaths (0-5 yrs. old)

2. Women deaths due to pregnancy

-related causes

3. Malnourished children (0-5 yrs. old)

4. HHs w/o access to safe water

5. HHs w/o access sanitary toilet

  • Health

  • Food & Nutrition

  • H20 & Sanitation

Survival

  • Shelter

  • Peace & Order

6. HHs who are informal settlers

7. HHs living in makeshift housing

8. HHs victimized by crimes

Security

9. HHs w/income below poverty threshold

10. HHs w/income below food threshold

11. HHs which experienced food shortage

12. Unemployment

13. Elementary school participation

14. High school participation

  • Income

  • Employment

  • Education

Enabling


The cbms process

The CBMS Process

Step 2

Data Collection

and

Field Editing

(Training Module 1)

Step 3

Data Encoding

and

Map Digitizing

(Training Module 2)

Step 1

Advocacy /

Organization

Step 8

Dissemination/

Implementation

and

Monitoring

Step 4

Processing and

Mapping

(Training Module 3)

Step 7

Plan Formulation

(Training Module 4)

Step 5

Data validation

and

Community

Consultation

Step 6

Knowledge

(Database)

Management


Alellie b sobrevi as germ n calfat

Status of CBMS Implementation

Coverage of CBMS implementation in the PHILIPPINES

as of April 8, 2013

21,424 barangays

in 791 municipalities and 63 cities

in 68 provinces (32 of which are provincewide)


Cbms countries

CBMS Countries

Pakistan

Benin

Argentina

South Africa

  • Africa

    • Benin

    • Burkina Faso

    • Ghana

    • Kenya

    • Nigeria

    • Senegal

    • South Africa

    • Tanzania

    • Zambia

  • Asia

    • Bangladesh

    • Cambodia

    • Indonesia

    • Lao PDR

    • Pakistan

    • Philippines

    • Vietnam

  • Latin America

    • Peru

    • Argentina


2 data and methods2

2. DATA AND METHODS

  • Overseas Filipino Workers(OFWs)

  • overseas contract workers who are “presently and temporarily out of the country to fulfill an overseas work for a specific length of time or who are presently at home on vacation but still has an existing contract to work abroad”

  • other Filipino workers abroad with valid working visa or work permits

  • those who had no working visa or work permits (tourist, visitor, student, medical, and other types of non-immigrant visas) but were presently employed and working full time in other countries

  • Remittances

  • money sent by migrant workers to their origin households

  • in-cash and in-kind (past 12 months)

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


2 data and methods3

2. DATA AND METHODS

  • Selected Sites

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


2 data and methods4

2. DATA AND METHODS

  • migrant HHs vs. non-migrant HHs

  • profile of OFWs

  • remittance patterns

  • impact of migration and remittances on poverty

    • -counterfactual income approach (using different methods of estimation)

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


2 data and methods5

2. DATA AND METHODS

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


2 data and methods6

2. DATA AND METHODS

  • indicators are estimated using the observed income for non-migrant households and the counterfactual income for migrant households

  • poverty rates and poverty gaps are estimated based on the official poverty threshold

  • poverty impact: counterfactual scenarios vs. observed scenario

  • using entire sample and sub-sample of migrant HHs

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives

3. EMPIRICAL RESULTS: DESCRIPTIVES

  • Less employed members among HHs with OFW

  • Higher school participation among school-aged children in HHs with OFW

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives1

3. EMPIRICAL RESULTS: DESCRIPTIVES

  • Heads of HHs with OFW are older, mostly female, married and generally better- educated

  • Lower proportion of poor among HHs with OFW

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives2

3. EMPIRICAL RESULTS : DESCRIPTIVES

  • most of the OFWs are male

  • most of the OFWs are spouses (particularly, male spouses) of the current HH head

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives3

3. EMPIRICAL RESULTS : DESCRIPTIVES

  • A significant proportion of OFWs are skilled workers

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives4

3. EMPIRICAL RESULTS : DESCRIPTIVES

  • Saudi Arabia is the main country of destination among OFWs

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives5

3. EMPIRICAL RESULTS : DESCRIPTIVES

  • Not all households with OFW received remittances

  • Migrant households relied heavily on remittance income

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results descriptives6

3. EMPIRICAL RESULTS : DESCRIPTIVES

Average share of remittances to total income among migrant HHs

A. By site and urbanity

B. By income quintile

  • Larger share of remittances to total income among migrant HHs in Pasay City; in urban areas

  • The richest HHs in Limay are more dependent on remittances; Middle-income HHs in Pasay City on average relied more on remittances as a source of income

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results impact on poverty

3. EMPIRICAL RESULTS: IMPACT ON POVERTY

  • Poverty rate and poverty gap should have been 2.6 percentage points higher and 1.8 percentage points higher in a no-migration counterfactual scenario, respectively.

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results impact on poverty1

3. EMPIRICAL RESULTS: IMPACT ON POVERTY


3 empirical results impact on poverty2

3. EMPIRICAL RESULTS: IMPACT ON POVERTY

  • Larger impact when remittances are treated simply as exogenous transfer (Counterfactual 1) compared to other methods

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results impact on poverty3

3. EMPIRICAL RESULTS: IMPACT ON POVERTY

  • The impact is larger than the impact obtained using the entire sample (e.g., a reduction in the proportion of poor among migrant HHs by 8.4% vs. 0.7% in counterfactual 3)

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results impact on poverty4

3. EMPIRICAL RESULTS: IMPACT ON POVERTY

Poverty status among migrant households: No-migration and Observed Scenario (% of households)

  • Migrant households do not necessarily benefit from migration and remittances

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results impact on poverty5

3. EMPIRICAL RESULTS: IMPACT ON POVERTY

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


3 empirical results impact on poverty6

3. EMPIRICAL RESULTS: IMPACT ON POVERTY

Distribution of migrant households by income quintile

(No-migration and Observed scenarios)

A. Pasay City

B. Limay

  • Changes in the distribution of migrant households by income quintile is evident in both sites

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


4 conclusion and recommendations

4. CONCLUSION AND RECOMMENDATIONS

  • The magnitude of impact varies depending on the method of estimating the counterfactual income.

  • - treating remittances as an exogenous transfer leads to underestimation of income and overestimation of the impact of migration

  • - Heckman estimation method is preferred

  • The impact on poverty among migrant households is larger than the impact obtained using the entire sample.

  • - not all migrant households benefitted from migration through improved welfare

  • - need for a much deeper analysis why migration and remittances are effective in helping certain groups of migrant households move out of poverty but not others

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


4 conclusion and recommendations1

4. CONCLUSION AND RECOMMENDATIONS

  • Expansion of this study

  • - looking at impact on other dimensions of poverty (e.g., education, health)

  • - determining the link between destination countries and poverty (“worse” destinations)

  • - employing other estimation methods (e.g., propensity score matching, instrumental variables)

  • - using a good panel data

  • - exploring the possibility of surveying both areas of origin and areas of destination depending on migrant concentration in destination countries

  • - incorporating the insights from different fields (e.g., sociology)

  • - presenting the results and getting feedback from the communities

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


4 conclusion and recommendations2

4. CONCLUSION AND RECOMMENDATIONS

  • Module on “migration and remittances” as a rider to CBMS

  • - collecting additional information on migration and remittances issues

  • examples:

  • 1. migration history (length of stay abroad)

  • 2. retrospective questions about pre-migration characteristics (e.g., income, work history)

  • 3. specific migration locations within destination countries

  • 4. information on family networks abroad

  • 5. dynamics of how money is sent (e.g., how often the migrant workers make transfers, how they make them and who precisely the money is sent to)

  • 6. spending patterns of remittance-recipient households

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


Thank you

Thank You!

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


Alellie b sobrevi as germ n calfat

Migration, Remittances and Poverty: Evidence from the Community-Based Monitoring System (CBMS) Data in Selected Communities in the Philippines

ALELLIE B. SOBREVIÑAS

  • GERMÁN CALFAT

    Arnoldshain Seminar XI: “Migration, Development and Demographic Change- Problems, Consequences, Solutions”

    University of Antwerp

    28 June 2013


3 empirical results impact on poverty7

3. EMPIRICAL RESULTS: IMPACT ON POVERTY


3 empirical results

3. EMPIRICAL RESULTS

Propensity Score Matching: Preliminary Results

  • Having an OFW increases income of households by 74.3 percent

  • Arnoldshain Seminar XI: Migration, Development and Demographic Change

  • University of Antwerp, June 25-28, 2013


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