Munich Personal RePEc Archive

Overseas Filipino Workers Remittances, Inequality and Quality of Life in the Philippines

Deluna, Roperto Jr and Pedida, Sunshine (2014): Overseas Filipino Workers Remittances, Inequality and Quality of Life in the Philippines.

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Abstract

This study examines the relationship among OFW remittances, inequality and quality of life in the Philippines. The study covered the period from 1990 to 2011 and employed Vector autoregressive (VAR) analysis to examine the relationship among the variables. Over the years, Human Development Index (HDI) as a measure of quality of life and remittances showed a generally increasing trend while the case is opposite for the level of inequality. Remittances and HDI has an average growth rate of 15.32% and 0.55% respectively. Inequality in the country has reduced on the average of 0.07% from 1990 to 2011. This generally implies that even in the ever increasing OFW remittances it has a very minimal effect on enhancing human development and reducing inequality in the country. Empirical results revealed that remittances has no significant effect on income inequality, however it has a significant effect on enhancing quality of life. In specific, for every unit increase in last year’s remittances, human development index will increase by 0.02. Results in granger causality revealed a bidirectional relationship between remittances and human development.

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