The role of social capital in the remittance decisions of Mexican migrants from 1969 to 2000
AbstractRemittances from migrants in the United States play a major role in the Mexican economy. This paper analyzes the role that different types of social capital play in the remittances decisions of Mexican migrants. Both the decision to remit and the decision on how much to remit are analyzed. The model, based on the idea of enlightened altruism, assumes that the migrant makes his decisions based on his own well-being as well as that of his household in Mexico and his community in Mexico. Social capital is defined as the resources one gains from relationships and networks. Four different types of social capital are identified in this paper: hometown-friendship networks in the United States, family networks in the United States, other-ethnicity-based networks in the United States, and community networks in Mexico. Social capital from friendships proves to be very positively significant in both the decision to remit and how much to remit. However, for all of the observations, familial social capital is not significant in either the decision to remit or how much to remit, although familial social capital has a positive role in both tests. Other-ethnicity-based social capital negatively influences both decisions and is significant in both as well. Social capital in Mexico has a significant negative impact on the two remittance decisions. Beyond social capital, this paper provides insight into other factors that affect remittance decisions including income, bank accounts, proximity to Mexico, exchange rate, interest rate differential, community infrastructure, the number of members in the Mexican household, Mexican household consumption, and time trends. In addition, to investigate time trends further, separate regressions were run on those observations where the last migration took place before 1991 and those whose last migration occurred after 1990.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2004-29.
Date of creation: 2004
Date of revision:
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-18, October.
- Poirine, Bernard, 1997. "A theory of remittances as an implicit family loan arrangement," World Development, Elsevier, vol. 25(4), pages 589-611, January.
- Flore Gubert, 2002.
"Do Migrants Insure Those who Stay Behind? Evidence from the Kayes Area (Western Mali),"
Oxford Development Studies,
Taylor & Francis Journals, vol. 30(3), pages 267-287.
- Gubert, Flore, 2002. "Do Migrants Insure Those who Stay Behind? Evidence from the Kayes Area (Western Mali)," Economics Papers from University Paris Dauphine 123456789/10842, Paris Dauphine University.
- Becker, Gary S, 1988.
"Family Economics and Macro Behavior,"
American Economic Review,
American Economic Association, vol. 78(1), pages 1-13, March.
- Gary S. Becker, . "Family Economics and Macro Behavior," University of Chicago - Population Research Center 87-16, Chicago - Population Research Center.
- Funkhouser, Edward, 1995. "Remittances from International Migration: A Comparison of El Salvador and Nicaragua," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 137-46, February.
- J. Edward Taylor & Scott Rozelle & Alan deBrauw, 1999. "Migration, Remittances, and Agricultural Productivity in China," American Economic Review, American Economic Association, vol. 89(2), pages 287-291, May.
- Dennis Ahlburg & Richard Brown, 1998. "Migrants' intentions to return home and capital transfers: A study of Tongans and Samoans in Australia," Journal of Development Studies, Taylor & Francis Journals, vol. 35(2), pages 125-151.
- Jorge Durand & William Kandel & Emilio Parrado & Douglas Massey, 1996. "International migration and development in mexican communities," Demography, Springer, vol. 33(2), pages 249-264, May.
- Hoddinott, John, 1994. "A Model of Migration and Remittances Applied to Western Kenya," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 459-76, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Meredith Rector).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.