nep-dem New Economics Papers
on Demographic Economics
Issue of 2024‒02‒19
two papers chosen by
Héctor Pifarré i Arolas, University of Wisconsin

  1. Intra-Household Insurance and the Intergenerational Transmission of Income Risk By Francesco Agostinelli; Domenico Ferraro; Xincheng Qiu; Giuseppe Sorrenti
  2. Measuring the Contribution of International Remittances to Household Expenditures and Economic Output: A Micro–Macro Analysis for the Philippines By Kikkawa, Aiko; Gaspar, Raymond; Kim, Kijin; Mariasingham, Mahinthan J.; Zamora, Christian Marvin

  1. By: Francesco Agostinelli (University of Pennsylvania); Domenico Ferraro (Arizona State University); Xincheng Qiu (Arizona State University); Giuseppe Sorrenti (University of Amsterdam)
    Abstract: This paper studies the mechanisms and the extent to which parental wage risk passes through to children’s skill development. Through a quantitative dynamic labor supply model in which two parents choose whether to work short or long hours or not work at all, time spent with children, and child-related expenditures, we find that income risk impacts skill accumulation, permanently lowering children’s skill levels. To the extent that making up for cognitive skill losses during childhood is hard—as available evidence suggests—uninsurable income risk can negatively impact the labor market prospects of future generations.
    Keywords: wage risk, household labor supply, Child Development, social insurance
    JEL: D10 J13 J22
    Date: 2024–01
  2. By: Kikkawa, Aiko (Asian Development Bank); Gaspar, Raymond (Asian Development Bank); Kim, Kijin (Asian Development Bank); Mariasingham, Mahinthan J. (Asian Development Bank); Zamora, Christian Marvin (Asian Development Bank)
    Abstract: The macroeconomic studies that assess the contribution of international remittances to the origin countries of migrants use a different definition of remittances than the microeconomic literature that examines the impact at the household and community levels. This study overcomes this difference in definition by integrating household expenditure data into the input-output analysis. Using the 2018 Family Income and Expenditure Surveys (FIES) of the Philippines, we find that remittance-financed household consumption and investment totaled ₱742.2 billion ($14.1 billion) and contributed 3.5% of the country’s total output, 3.4% of gross domestic product (GDP), and 3.7% of total employment in 2018. We note that the largest value added is accruing to the manufacturing sector as it accounts for more than a third of remittance recipients’ spending basket followed by the trade and agriculture, forestry, and fisheries sectors, which are closely linked to the manufacturing industry. The international remittances income reported by households is less than half (43.8%) of the ₱1.7 trillion ($32.2 billion) aggregate international remittances reported by the central bank in the same year based on the balance of payments definition.
    Keywords: international remittance; household expenditure; micro–macro analysis; Philippines
    JEL: C67 D12 F24
    Date: 2024–02–02

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