Abundance from Abroad: Migrant Income and Long-Run Economic Development

Gaurav Khanna; Emir Murathanoglu; Caroline Theoharides; Dean Yang

doi:10.1257/aer.20241465

Abundance from Abroad: Migrant Income and Long-Run Economic Development

Gaurav Khanna¹; Emir Murathanoglu²; Caroline Theoharides³; Dean Yang⁴

¹ University of California, San Diego (email: ) · ² Oberlin College (email: ) · ³ Amherst College (email: ) · ⁴ University of Michigan, NBER, and BREAD (email: )

American Economic Review 2026

We study how international migrant income prospects affect long-run development in origin areas. We leverage the 1997 Asian Financial Crisis exchange rate shocks in a shift-share identification strategy across Philippine provinces. Initial migrant income shocks are magnified six-fold over time, increasing domestic income, education levels, migrant skills, and high-skilled migration. Remarkably, 74.9 percent of long-run income gains come from domestic rather than migrant income. Trade driven impacts of exchange rate shocks are orthogonal to effects via migrant income. A structural model reveals that 19.7 percent of long-run income gains stem from educational investments. International migration fosters broad economic development in origin communities. (JEL F22, F31, G01, J24, J82, O15, O16)

DOI: 10.1257/aer.20241465
Volume: 116 (4)
Pages: 1540-1577
Language: en
Export: BibTeX
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