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Financing consumption over the lifecycle and overseas workers’ remittances: Findings from the 1999 and 2007 Philippine National Transfer Accounts

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  • Racelis, Rachel H.
  • Abrigo, Michael R.M.
  • Salas, J.M. Ian

Abstract

This paper compares the patterns of consumption, labor income earned and financing of consumption at different ages or stages of the lifecycle of the average Filipino between the years 1999 and 2007 using the Philippine (NTA) for these years. The comparison shows some changes worth noting and these include the overall increase in per capita labor income and consumption in real terms, the rise in real per capita private health spending at older ages, and change in reliance on labor income as a source to finance consumption of the young and the elderly. Additionally, the implications of changing the definition or treatment of remittances of Overseas Filipino Workers (OFWs) in the estimation of the Philippine NTA are demonstrated and discussed. The 2007 NTA was estimated two ways: first with OFW remittances defined as mainly inter-household transfers; and, second, with OFW remittances defined as mainly labor income (earnings) in the revised estimates. The implications of the change in definition is examined by comparing the first and revised sets of 2007 NTA estimates, and it is noted that the definitional change results in a smaller lifecycle deficit or a smaller gap between consumption and labor income in the revised estimates, among others.

Suggested Citation

  • Racelis, Rachel H. & Abrigo, Michael R.M. & Salas, J.M. Ian, 2015. "Financing consumption over the lifecycle and overseas workers’ remittances: Findings from the 1999 and 2007 Philippine National Transfer Accounts," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 69-78.
    • Handle: RePEc:eee:joecag:v:5:y:2015:i:c:p:69-78
    DOI: 10.1016/j.jeoa.2014.09.008
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    References listed on IDEAS

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    1. Tabuga, Aubrey D., 2007. "International Remittances and Household Expenditures: the Philippine Case," Discussion Papers DP 2007-18, Philippine Institute for Development Studies.
    2. Rachel H. Racelis & J.M Ian S. Salas, 2007. "Measuring Economic Lifecycle and Flows across Population Age Groups : Data and Methods in the Application of the NTA in the Philippines," Development Economics Working Papers 22682, East Asian Bureau of Economic Research.
    3. Orbeta, Aniceto Jr. C. & Abrigo, Michael Ralph M., 2009. "Philippine International Labor Migration in the Past 30 Years: Trends and Prospects," Discussion Papers DP 2009-33, Philippine Institute for Development Studies.
    4. Irving Fisher Committee, 2007. "Financial aspects of migration: the measurement of remittances, The IFC's contribution to the IAOS Conference, 6-8 September 2006," IFC Bulletins, Bank for International Settlements, number 27.
    5. David A. Wise, 2009. "Developments in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise09-1.
    6. Andrew Mason & Ronald Lee & An-Chi Tung & Mun-Sim Lai & Tim Miller, 2009. "Population Aging and Intergenerational Transfers: Introducing Age into National Accounts," NBER Chapters, in: Developments in the Economics of Aging, pages 89-122, National Bureau of Economic Research, Inc.
    7. Salas, J.M. Ian S. & Racelis, Rachel H., 2008. "Consumption, Income, and Intergenerational Reallocation of Resources: Application of NTA in the Philippines, 1999," Discussion Papers DP 2008-12, Philippine Institute for Development Studies.
    8. Salas, J.M. Ian S. & Abrigo, Michael Ralph M. & Racelis, Rachel H., 2014. "Comparing the 1999 and 2007 Philippine NTA Estimates and Examining the Effects of a Definitional Change of Overseas Workers` Remittances," Discussion Papers DP 2014-24, Philippine Institute for Development Studies.
    9. Salas, J.M. Ian S. & Abrigo, Michael Ralph M. & Racelis, Rachel H., 2012. "Filipino Elderly Living Arrangements, Work Activity, and Labor Income as Old-age Support," Discussion Papers DP 2012-31, Philippine Institute for Development Studies.
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    Cited by:

    1. Herrin, Alejandro N. & Salas, J.M. Ian S. & Abrigo, Michael Ralph M. & Racelis, Rachel H., 2016. "Consumption, Labor Income, and Lifecycle Deficit by Urban-Rural Residence and by Income Group: Philippines NTA 1991, 1999, and 2011," Discussion Papers DP 2016-31, Philippine Institute for Development Studies.
    2. Herrin, Alejandro N. & Salas, J.M. Ian S. & Abrigo, Michael Ralph M. & Racelis, Rachel H., 2015. "Philippines 2011 National Transfer Accounts Estimates of Consumption and Labor Income Age Profiles: Discussions on the 1991-2011 Age Profile Change and Implications on Economic Gains from the First De," Discussion Papers DP 2015-45, Philippine Institute for Development Studies.
    3. Racelis, Rachel H. & Abrigo, Michael Ralph M. & Salas, J.M. Ian S. & Herrin, Alejandro N., 2016. "Consumption, Labor Income, and Lifecycle Deficit by Urban-Rural Residence and by Income Group: Philippines NTA 1991, 1999, and 2011," Research Paper Series DP 2016-31, Philippine Institute for Development Studies.
    4. Abrigo, Michael R.M. & Racelis, Rachel H. & Salas, J.M. Ian & Herrin, Alejandro N., 2016. "Decomposing economic gains from population age structure transition in the Philippines," The Journal of the Economics of Ageing, Elsevier, vol. 8(C), pages 19-27.
    5. Racelis, Rachel H. & Abrigo, Michael Ralph M. & Salas, J.M. Ian S. & Herrin, Alejandro N., 2015. "Philippines 2011 National Transfer Accounts Estimates of Consumption and Labor Income Age Profiles: Discussions on the 1991-2011 Age Profile Change and Implications on Economic Gains from the First De," Research Paper Series DP 2015-45, Philippine Institute for Development Studies.

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