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

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

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

  • Gaurav Khanna
  • Emir Murathanoglu
  • Caroline Theoharides
  • Dean Yang
American Economic Review
vol. 116, no. 4, April 2026
(pp. 1540–77)
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Abstract

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.

Citation

Khanna, Gaurav, Emir Murathanoglu, Caroline Theoharides, and Dean Yang. 2026. "Abundance from Abroad: Migrant Income and Long-Run Economic Development." American Economic Review 116 (4): 1540–77. DOI: 10.1257/aer.20241465

Additional Materials

JEL Classification

  • F22 International Migration
  • F31 Foreign Exchange
  • G01 Financial Crises
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J82 Labor Standards: Labor Force Composition
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance