Insuring against disasters and poor institutions: Remittances as aid and informal family insurance during Typhoon Haiyan in the Philippines

College

Carlos L. Tiu School of Economics

Document Type

Article

Source Title

Journal of Development Studies

Volume

6

Issue

7

Publication Date

2025

Abstract

Aggregate international remittances have been documented to increase as an ex-post response to a disaster, but subtle nuances may be present when looking at household level behaviour. This study paper looks at the response of remittance incidence and levels to a disaster using a natural experiment exploiting the randomness of the path of Typhoon Haiyan, one of the strongest typhoons in Philippine history. We leverage the available 2008–2014 APIS into repeated cross-sections and use a difference-in-differences and event-study approach. Estimates reveal a 3.9 per cent higher remittance incidence but no impact in remittance levels. The positive remittance response is only heterogeneously observable for lower-income households – particularly, third- and fourth-income decile households. We find suggestive evidence that remittance participation is higher with better regional infrastructure and institutions on average, but remittances increase even more so during a crisis when the home region’s infrastructure is deficient. The results paint remittances as an extremely resilient, risk-coping mechanism for households during disasters.

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Keywords

Typhoons—Economic aspects—Philippines; Typhoon Haiyan, 2013; Emigrant remittances—Philippines; Disasters—Economic aspects—Philippines

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