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Essays on Migration and Remittances in the Philippines

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Essays on Migration and Remittances in the Philippines ESSAYS ON MIGRATION AND REMITTANCES IN THE PHILIPPINES CHRISTOPHER JAMES R. CABUAY A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY AT THE AUSTRALIAN NATIONAL UNIVERSITY FEBRUARY 2021 © Copyright by Christopher James R. Cabuay 2021 All Rights Reserved 2 Declaration Declaration This thesis is my own work. The data used in Chapter 2 was purchased by the De La Salle University Angelo King Institute for Economic and Business Studies (DLSU-AKIEBS) from the Philippine Statistics Authority (PSA) for use of their faculty members and students. The datasets used in Chapter 3 were taken from the Integrated Public Use Microdata Series – International (IPUMS-I) of the Minnesota Population Center, and the International Labour Organization’s ILOSTAT. The survey dataset used in Chapter 4 was conducted by the Partnership for Economic Policy Community-Based Monitoring System (PEP-CBMS) and received from DLSU- AKIEBS. The views expressed in this thesis are my own and are not necessarily shared by the institutions mentioned above. All errors are my own. Christopher James R. Cabuay June 2021 3 Acknowledgements This PhD journey has been an interesting one. For many times I have been brought down to my knees crying as I was destroyed utterly. And yet, I could say at the very least – I was never bored. I struggled but I stepped up each time, and in many ways, I have changed. I have grown in many facets, not just academically, and now despite everything, I see the universe in all its splendor. I am truly grateful. To God, for this beautiful world, and this marvelous experience. Call it fate or coincidence, everything unfolded as what was meant to be. Let me become an instrument of Your peace, glory and mercy. To my supervisor, Prof. Budy P. Resosudarmo. I do not remember why you picked me, sir, but I can’t thank you enough for your guidance. Everything I learned from you will stay with me for the rest of my life, and for that, I give you my eternal loyalty and respect. I hope that I was able to meet your expectations and that I could become half the economist you are. Here’s to us working together in the future, Pak! To my panelists, Prof. Hal Hill and Prof. Tess Tiongco. Thank you for the support and wonderful comments you gave me to improve my papers. It was truly an honor to have your guidance in my panel. To my benefactors, the Australian National University, Crawford School of Public Policy, Australia Awards Scholarships (AAS), Milalin, Nayra, Enna, Billie, Liz, Ngan, Aishah, and Ida. Without whom none of this would be possible. Thank you for your support. Please know that you did not make a mistake in funding me. I will do all I can to give a bounteous return on your investment. To the brilliant Professors of the Arndt-Corden Department of Economics and the Research School of Economics, Chandra, Ross, Paul, Ryan, Arianto, Ligang, Sarah, Ruitian, Tim, Thomas, Xin Meng, Amir, Tina, and Dana. It was truly an honor to learn from you all in both classes and seminars. Thank you for all the helpful comments and giving me the chance to work with you. To the paragons that helped me in my stay here, Fr. Laurie, Sandy, Heeok, Megan, Tracy. For your invaluable help in a wide array of things, ranging from help with GIS, administrative matters, and funding, to refreshing my tired soul. In many ways you made my candidature easier. To Dr. Tullao, the DLSU School of Economics, and DLSU-AKIEBS. For putting me and inspiring me to become an economist. I hope to be able to make a positive change wherever I may be. 4 To the Asian and Australasian Society of Labour Economics and two anonymous reviewers from Labour Economics. My first major conference and submission in a long time. I thank all involved for helping me gain confidence in presenting and submitting again. Thank you for the helpful comments for my first paper. They were undeniably devastating, but thanks to that, I have been tempered even more. To Mas Rus’an, Mbak Ruth, Phan, and Oppa Yim. Geniuses and legends in the making. Thank you for discussing my papers in the PhD seminars. You truly inspire me to soar even greater heights. To my colleagues, Oppa Golf, Mas Yuventus, Mas Riswandi, Jose, Mbak Dika, Mbak Inggrid, Mas Nasir, Mas Krisna, Mas Wishnu, Mbak Martha, Mbak Anna, Mbak Umi, and Mas Agung. I will never forget the times we spent together studying, cooking, struggling, discussing, and playing. I wish you all success in your respective careers. Let us work together to bring a positive change in the region! To my AAS batchmates, Charles, Sol, Sarah, Oli, Jerene, and Gab. My friends – no, my family. What we shared in my earlier years in Australia fills a special place in my heart and will stay with me forever. With you I confirmed that family need not be related by blood. We will work together again, I know. To the subtle group, Albert, Mike, Rox, Eli, Alab, Epi, Aly, Sunny, Jason, Isabelle, Patricia, Lois, Belle, Tom, Bea, Doty, and Andy. The universe conspired to bring us all together. It brings me great joy to have met you all, that we have stayed (clung) together up until the end of my program, and how our family has grown bigger. Dwell not on this parting, for we will meet again in brighter days, I am sure. I will always look back at our time together with fondness. Take care of each other. To the assorted Filipinos in Canberra, Reg, Ryan, Laya, Cy, Jayson, Iraya, Cherry, Bryan, Chichi, Joanna, Emer, Jennie, and Lem and the Australian National University Filipino Association. Thank you for the (drunken) fun times, nature trips, and food. You have all given my family and I memories we will cherish forever. May our community of scholars grow even larger with you all as its pillars. To the bois, Mart, Dims, Pins, Vic, Dan, Kokoy, and Sol You kept me sane while I was writing (hunting). Balancing everything was a challenge. There must have been an achievement there or something. To the badminton boys and the John’s choir. Whether through fitness or music, I grew in many ways thanks to our bond. Working with you helped me develop leadership and compassion. To my mom, Beth, my dad, Tony, and my in-laws, Robbie, JC, and Jocelyn. Thank you for your support during our stay in Australia. We will be together again soon. To this generous country, Australia, this wonderful city, Canberra, and our rustic apartment at Playfair. Not to mention the Florey house (Dubidubidapdap). I survived! Thank you for everything. Your majestic mountains, magnificent lakes, noble wildlife, and heartwarming people. Home is where the heart is, and even if it was only a short while, know that you will always have my heart. 5 I dedicate this thesis to my daughter, Lucia, and my wife (life), Ket. You both were with me from the start, and I would not be on this path if not for you. You were the necessary and sufficient conditions for the completion of this thesis, and our success here in this country. We have overcome a lot together, and for that, we have grown undeniably closer to our full potential. Let this be the proof that with the proper support, anything can be done. This is not just my success. This is ours. We will find our way back here for sure. For now, let us stay true to our calling. Become that which there is none, that which is needed. I love you both, always. To my country, I offer knowledge and wisdom. And to the world, I offer light. “Behold, I am going to do something new; Now it will spring up; will you not be aware of it? I will even make a way in the wilderness, rivers in the desert.” Isaiah 43:19 6 Abstract This thesis compiles three essays on migration and remittances in the Philippines. The first essay investigates the role of remittances as an informal risk-coping mechanism for families during a disaster, and explores the interaction between remittances, relief, and a region’s infrastructure and institutions. The study employs a unique identification strategy by tracking the regions that were directly lying on the path of Typhoon Haiyan, one of the most devastating typhoons in Philippine history. Using a difference-in- differences approach, the remittance response was found to be an increase in incidence but not necessarily in level. The extended analysis only provided suggestive evidence that remittances and relief generally act as substitutes but serve as complements during disasters. Moreover, remittances were higher in regions with good facilitators, but remittances tend to insure households against poor institutions during disasters. This study establishes remittances as both aid and insurance during times of disaster. The second essay delves into how culture, migrant networks, and immigration policies may influence the labor market assimilation of Filipino immigrants. This study departs from the conventional framework used in studying assimilation by focusing only on immigrants from one sending country but in different host countries. This emphasizes the effects of the host country institutions on wage and employment assimilation. It was found that larger similarity in culture, a larger migrant network, and more selective immigration policies reduce the wage gap relative to natives and improves the transferability of human capital, thus facilitating assimilation. However, assimilation is hampered in countries with greater culture diversity and fractionalization. The third essay estimates the spatial spillover effects of migration on education.
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