Split Decisions : Family Finance When a Policy Discontinuity Allocates
Labor markets are increasingly global. Overseas work can enrich households but also split them geographically, with ambiguous net effects on decisions about work, investment, and education. These net effects, and their mechanisms, are poorly unders...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/12/17043015/split-decisions-family-finance-policy-discontinuity-allocates-overseas-work http://hdl.handle.net/10986/12181 |
| Summary: | Labor markets are increasingly global.
Overseas work can enrich households but also split them
geographically, with ambiguous net effects on decisions
about work, investment, and education. These net effects,
and their mechanisms, are poorly understood. This study
investigates a policy discontinuity in the Philippines that
resulted in quasi-random assignment of temporary,
partial-household migration to high-wage jobs in Korea. This
allows unusually reliable measurement of the reduced-form
effect of these overseas jobs on migrant households. A
purpose-built survey allows nonexperimental tests of
different theoretical mechanisms for the reduced-form
effect. The study also explores how reliably the
reduced-form effect could be measured with standard
observational estimators. It finds large effects on
spending, borrowing, and human capital investment, but no
effects on saving or entrepreneurship. Remittances appear to
overwhelm household splitting as a causal mechanism. |
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