Temporary Migration Overseas and Household Labor Supply: Evidence from Urban Philippines

Abstract

The impact of international migration on the labor supply of workers' nonmigrant relatives has not been well documented in the literature. Using household survey data representing mostly overseas contract workers, i.e., temporary migrants, this paper shows that labor supplies of migrants and their nonmigrant relatives are inseparable. Migrants reduce the labor supply of nonmigrant relatives, which translates into lower earnings from local labor markets. Households substitute income for more leisure – a significant and previously little recognized benefit of emigration for Philippine households. This benefit varies by gender of nonmigrants and is generally higher for men.