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Remittances developmental potential in Mexico

Edlund, Karolina LU (2018) EKHS21 20181
Department of Economic History
Abstract
The U.S-Mexico migration corridor has the largest flows of migrants in the world. Mexican migrants send home approximately USD 25 billion annually, making Mexico the fourth biggest remittance receiver in the world. Personal remittances are Mexico’s largest single source of foreign income, as it surpassed oil income in 2014. Some scholars argue that due to the large size of remittances, it holds a developmental promise. Moreover, theory suggests that in communities new to migration, the poor cannot afford to participate in migration, indicating that remittances would have an un-equalizing effect on society. Thus, this paper aims at answering whether remittances lead to economic development of Mexico, instead of merely being a means to... (More)
The U.S-Mexico migration corridor has the largest flows of migrants in the world. Mexican migrants send home approximately USD 25 billion annually, making Mexico the fourth biggest remittance receiver in the world. Personal remittances are Mexico’s largest single source of foreign income, as it surpassed oil income in 2014. Some scholars argue that due to the large size of remittances, it holds a developmental promise. Moreover, theory suggests that in communities new to migration, the poor cannot afford to participate in migration, indicating that remittances would have an un-equalizing effect on society. Thus, this paper aims at answering whether remittances lead to economic development of Mexico, instead of merely being a means to increase consumption. To account for varying migration history the analysis will be regional. The hypothesis of remittances leading to increased development in Mexico will be tested in a two-step approach. The effect of marginal changes in remittances will be analyzed on measures of poverty and inequality, to establish whether or not the poorest is participating in migration to a large extent. Household, survey data from the Mexican National Institute of Statistics and Geography (INEGI) will be used in the analysis. The results show that both the size and the distribution of international remittances are more favorable in the high migration region, the Central-West, explaining its bigger impact on poverty and inequality. These results indicate that the prevalence of strong migration networks increase the access of international migration of the poor, thus policies should strengthen migration networks. (Less)
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author
Edlund, Karolina LU
supervisor
organization
alternative title
A regional study of the effects of remittances on poverty and income inequality
course
EKHS21 20181
year
type
H1 - Master's Degree (One Year)
subject
keywords
Remittances, international migration, Mexico, poverty, inequality
language
English
id
8952211
date added to LUP
2018-08-20 14:48:56
date last changed
2018-08-20 14:48:56
@misc{8952211,
  abstract     = {The U.S-Mexico migration corridor has the largest flows of migrants in the world. Mexican migrants send home approximately USD 25 billion annually, making Mexico the fourth biggest remittance receiver in the world. Personal remittances are Mexico’s largest single source of foreign income, as it surpassed oil income in 2014. Some scholars argue that due to the large size of remittances, it holds a developmental promise. Moreover, theory suggests that in communities new to migration, the poor cannot afford to participate in migration, indicating that remittances would have an un-equalizing effect on society. Thus, this paper aims at answering whether remittances lead to economic development of Mexico, instead of merely being a means to increase consumption. To account for varying migration history the analysis will be regional. The hypothesis of remittances leading to increased development in Mexico will be tested in a two-step approach. The effect of marginal changes in remittances will be analyzed on measures of poverty and inequality, to establish whether or not the poorest is participating in migration to a large extent. Household, survey data from the Mexican National Institute of Statistics and Geography (INEGI) will be used in the analysis. The results show that both the size and the distribution of international remittances are more favorable in the high migration region, the Central-West, explaining its bigger impact on poverty and inequality. These results indicate that the prevalence of strong migration networks increase the access of international migration of the poor, thus policies should strengthen migration networks.},
  author       = {Edlund, Karolina},
  keyword      = {Remittances,international migration,Mexico,poverty,inequality},
  language     = {eng},
  note         = {Student Paper},
  title        = {Remittances developmental potential in Mexico},
  year         = {2018},
}