Do remittances boost household spending: New evidence from migrants’ household survey

This study examines the impact of remittances on household spending in the Philippines, a major remittance-receiving country. Utilizing unique surveys of migrant households and financial institutions, we provide a nuanced analysis of how remittances shape consumption patterns across income groups. While remittances generally enhance household spending, we find that financial constraints remain binding for poorer households, limiting the potential welfare gains. In addition to household-level dynamics, our analysis uncovers key macroeconomic and structural drivers of remittance flows, notably the number of overseas workers, domestic unemployment rates, and peso depreciation, while higher regional wages and financial transaction costs act as deterrents. These results highlight how broader economic factors not only affect the volume of remittance inflows but also indirectly shape household consumption outcomes, offering valuable insights for policymakers seeking to maximize the developmental impact of remittances.