The Migratory Response of Labor to Special Economic Zones in the Philippines, 1995–2005
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In the mid 1990s the Filipino government adopted a new export-led development policy in an attempt to attract new investments and lower the unemployment rates throughout the country. The central idea was to provide foreign investors more access to Filipino markets and labor by giving them investor tax breaks and lowering trade tariffs. In return, the government hoped that investors would bring large amounts of capital into designated areas thereby creating new jobs and stimulating the domestic economy. The Filipino created the Philippine Economic Zone Authority (PEZA) and Base Conversion Development Authority (BCDA) to manage the operation of the Special Economic Zones (SEZ) throughout the country. Between 1995 and 2005 PEZA and BCDA approved over 200 new SEZ that have created over four million jobs throughout the country. However, these jobs are concentrated in a small number of regions. This research uses a modified Harris-Todaro model and GIS techniques to examine the inter-regional migration response to the PEZA and BCDA programs’ geographically targeted investments. We show that areas with the highest job growth have high rates of in-migration while regions with low SEZ related investments have become migration-sending areas. In addition, our analysis shows that in-migration to SEZ affected areas has tended to surpass available jobs resulting in high unemployment. We show how the Harris-Todaro model in combination with GIS might be used to identify locations for future PEZA and BCDA investments that are less likely to result in regional population loss or growth in unemployment.
KeywordsPhilippines Labor migration Special economic zones Rural–urban migration GIS
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