In the days following the Brexit vote on whether to leave or remain in the European Union, we have seen how Britain’s vote to leave has caused stock markets and the value of the British pound to fall. But what does the vote mean for those living outside of the U.K.?
In The Washington Post, author Max Ehrenfreund looks at how foreign countries and the relatives of those living within the U.K. will be affected in the article, "The people who will suffer the most severe impact of Brexit don't live in the U.K." A depreciated British pound and a slowdown in British economic growth likely means the U.K. will provide less foreign aid.
In addition, the depreciation of the pound and a worsening British economy is bad news for migrant workers in Britain, and their families back home. Ehrenfreund cited U-M Professor of Economics Dean Yang’s 2008 study of Filipino migrants. Yang found that when Filipino migrants faced sudden currency depreciations in the countries where they were working, their families in the Philippines saw declines in remittance receipts, reductions in child school attendance, and increases in child labor.
“There is a very, very strong link between how well migrants are doing overseas and how well their families are doing back home…We should expect families back home to suffer as a result [of Brexit],” said Yang.
Read, “The People who will suffer the most severe impact of Brexit don’t live in the U.K.” from The Washington Post.
Read Dean Yang’s cited paper, “International Migration, Remittances, and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks,” Economic Journal, Vol. 118, April 2008, pp. 591-630.
Learn more about Dean Yang's work!