The Effect of Remittances on Housing Expenditure in Filipino Households

• Main Authors: Rigonan, Joaquin Franco, Salvo, Angelo, Dacuycuy, Lawrence B., Tullao, Tereso S., Jr, Villamil, Winfred, Yu, Krista
• Format: text
• Published: Animo Repository 2024
• Subjects: OFW; Remittances; Filipinos; Household Expenditures; Behavioral Economics; Income Distribution; Labor Economics
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/190; https://animorepository.dlsu.edu.ph/context/res_aki/article/1191/viewcontent/DLSU_AKI_Policy_Brief__2024_01_025.pdf
• Institution: De La Salle University

Overseas Filipino Workers (OFWs) have chosen to work abroad due to the abundance of better work opportunities and a higher salary earned. Migrant workers send remittances to their families from their country of origin to bring extra income for these households to spend on essential consumption. These remittances serve as additional income and protection for recipient households, easing their consumption and enabling them to spend their money on education, housing construction, and household electrical appliances. Numerous existing literature has stated that household-receiving remittances spend more money on investments that will help improve their standard of living; one of these investments is housing. The researchers used a probit model to estimate the propensity scores to be used in propensity score matching. Using the coefficients from the average treatment effect (ATE) and the average treatment effect on the treated (ATT), results from the study find that remittance-receiving households significantly spend more on housing expenditures, specifically actual rentals, and maintenance costs, than non-receiving households. However, it was found that imputed rent for households receiving remittances are significantly lower than non-receiving households.