Macroeconomic Determinants of International Migration of Overseas Filipino Workers

Abstract

This study focuses on the econometric analysis of determinants of international migration of overseas Filipino workers across different countries. The number of overseas Filipino workers as the regressand, while the regressors are remittances, unemployment, and wage rate, using time-series data from years 1990 to 2019. The selected variables are considered as a few of the major economic factors why Filipino workers migrate. Other determinants or factors of migration were not examined by the researchers. This study discovered that remittances, wage rate, and unemployment rate are statistically significant and positively correlated to the parameters of overseas Filipino workers in the Philippines. It is determined that remittances are positively correlated with the number of overseas Filipino workers. In addition, it was discovered that the unemployment rate and the number of overseas Filipino workers are negatively correlated in the absence of the wage rate and remittances in the simple linear regression. However, due to the influence of the wage rate and remittances in the model, the relationship of the unemployment rate with the number of overseas Filipino workers proves to be positively correlated. The obtained value of the model suggests that 91.21% of the variability in overseas Filipino workers can be explained by the variability of all independent variables. Furthermore, as indicated by the diagnostic tests' result, including the Pearson R correlation coefficient, the overall model is significant and shows no evidence of multicollinearity, serial correlation, heteroscedasticity, and irregular distribution of residuals.