IDEAS home Printed from https://ideas.repec.org/a/ipn/panora/vviiy2012i14p121-163.html
   My bibliography  Save this article

Migration and Remittances Effects on Consumption of the Poorest : the Mexican Case

Author

Listed:
  • Mora Rivera, José Jorge.

    (Instituto Tecnológico y de Estudios Superiores de Monterrey, Campus Ciudad de México)

  • Arellano-González, Jesús.

    (El Colegio de México)

Abstract

In this work we present empirical evidence to test for the impact of remittances on expenditure patterns in rural Mexican households located in poor areas. Using data from the Progresa-Oportunidades program from 1997 to 2000, we develop an econometric approach that deals with the selection mechanism affecting migration decisions, to estimate the impact that the probability of receiving remittances, internal and external, has on expenditure patterns of rural poor households. Our findings indicate that there are significant effects on some expenditure categories. Household with higher probabilities of receiving internal and external remittances are more likely to spend in expenditure categories like physical and human investments./ Este trabajo presenta evidencia empírica sobre el efecto de las remesas en los patrones de gasto de hogares rurales que viven en algunas de las zonas más pobres de México. Utilizando datos de las encuestas del programa Progresa-Oportunidades de los años 1997 al 2000, se desarrolla un modelo econométrico que considera el proceso de autoselección involucrado en el fenómeno migratorio, para estimar el impacto que tiene la probabilidad de recibir remesas, internas y externas, en los patrones de gasto de estos hogares. Los resultados señalan que existen efectos significativos en ciertas categorías de gasto. Dichos hallazgos indican que los hogares con mayor probabilidad de recibir remesas tienen mayor propensión a gastar en categorías de gasto relacionadas con la inversión física y humana.

Suggested Citation

  • Mora Rivera, José Jorge. & Arellano-González, Jesús., 2012. "Migration and Remittances Effects on Consumption of the Poorest : the Mexican Case," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(14), pages 121-163, primer se.
  • Handle: RePEc:ipn:panora:v:vii:y:2012:i:14:p:121-163
    as

    Download full text from publisher

    File URL: http://yuss.me/revistas/panorama/pano2012v07n14a06p121_163.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2001), pages 45-96, August.
    2. Taylor, J Edward & Rozelle, Scott & de Brauw, Alan, 2003. "Migration and Incomes in Source Communities: A New Economics of Migration Perspective from China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 75-101, October.
    3. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    4. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    5. Ernesto López-Córdova, 2005. "Globalization, Migration, and Development: The Role of Mexican Migrant Remittances," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2005), pages 217-248, August.
    6. Alan de Brauw & John Giles, 2018. "Migrant Labor Markets and the Welfare of Rural Households in the Developing World: Evidence from China," The World Bank Economic Review, World Bank, vol. 32(1), pages 1-18.
    7. Garcia, Jaume & Labeaga, Jose M, 1996. "Alternative Approaches to Modelling Zero Expenditure: An Application to Spanish Demand for Tobacco," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 489-506, August.
    8. Kenneth I. Wolpin & Petra E. Todd, 2006. "Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility," American Economic Review, American Economic Association, vol. 96(5), pages 1384-1417, December.
    9. Shawn Kanaiaupuni & Katharine Donato, 1999. "Migradollars and mortality: The effects of migration on infant survival in Mexico," Demography, Springer;Population Association of America (PAA), vol. 36(3), pages 339-353, August.
    10. Guy Stecklov & Paul Winters & Marco Stampini & Benjamin Davis, 2003. "Can Public Transfers Reduce Mexican Migration? A study based on randomized experimental data," Working Papers 03-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    11. David J. McKenzie & Nicole Hildebrandt, 2005. "The Effects of Migration on Child Health in Mexico," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2005), pages 257-289, August.
    12. Amemiya, Takeshi, 1974. "Multivariate Regression and Simultaneous Equation Models when the Dependent Variables Are Truncated Normal," Econometrica, Econometric Society, vol. 42(6), pages 999-1012, November.
    13. Amuedo-Dorantes, Catalina & Sainz, Tania & Pozo, Susan, 2007. "Remittances and Healthcare Expenditure Patterns of Populations in Origin Communities: Evidence from Mexico," IDB Publications (Working Papers) 2620, Inter-American Development Bank.
    14. Alderman, Harold, 1996. "Saving and economic shocks in rural Pakistan," Journal of Development Economics, Elsevier, vol. 51(2), pages 343-365, December.
    15. Oliver, Azuara, 2009. "Does poverty alleviation increase migration? evidence from Mexico," MPRA Paper 35076, University Library of Munich, Germany.
    16. Woodruff, Christopher & Zenteno, Rene, 2007. "Migration networks and microenterprises in Mexico," Journal of Development Economics, Elsevier, vol. 82(2), pages 509-528, March.
    17. Kurt Unger, 2005. "Regional Economic Development and Mexican Out-Migration," NBER Working Papers 11432, National Bureau of Economic Research, Inc.
    18. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-371, July.
    19. Borraz Fernando, 2005. "Assessing the Impact of Remittances on Schooling: the Mexican Experience," Global Economy Journal, De Gruyter, vol. 5(1), pages 1-32, April.
    20. Alejandra Cox Edwards & Manuelita Ureta, 2003. "International Migration, Remittances, and Schooling: Evidence from El Salvador," NBER Working Papers 9766, National Bureau of Economic Research, Inc.
    21. Catalina Amuedo-Dorantes & Tania Sainz & Susan Pozo, 2007. "Remittances and Healthcare Expenditure Patterns of Populations in Origin Communities: Evidence from Mexico," IDB Publications (Working Papers) 9355, Inter-American Development Bank.
    22. Taylor, J. Edward & Martin, Philip L., 2001. "Human capital: Migration and rural population change," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 9, pages 457-511, Elsevier.
    23. Federico Perali & Jean-Paul Chavas, 2000. "Estimation of Censored Demand Equations from Large Cross-Section Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1022-1037.
    24. Edwards, Alejandra Cox & Ureta, Manuelita, 2003. "International migration, remittances, and schooling: evidence from El Salvador," Journal of Development Economics, Elsevier, vol. 72(2), pages 429-461, December.
    25. Buddelmeyer, Hielke & Skoufias, Emmanuel, 2003. "An Evaluation of the Performance of Regression Discontinuity Design on PROGRESA," IZA Discussion Papers 827, Institute of Labor Economics (IZA).
    26. Barham, Bradford & Boucher, Stephen, 1998. "Migration, remittances, and inequality: estimating the net effects of migration on income distribution," Journal of Development Economics, Elsevier, vol. 55(2), pages 307-331, April.
    27. Liliana Meza González & Liliana Meza González & Carla Pederzini Villarreal, 2009. "Migración internacional y escolaridad como medios alternativos de movilidad social: el caso de México," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 0(Special i), pages 163-206.
    28. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, June.
    29. Panagiotis Lazaridis, 2003. "Household meat demand in Greece: A demand systems approach using microdata," Agribusiness, John Wiley & Sons, Ltd., vol. 19(1), pages 43-59.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aggarwal, Reena & Demirgüç-Kunt, Asli & Pería, Maria Soledad Martínez, 2011. "Do remittances promote financial development?," Journal of Development Economics, Elsevier, vol. 96(2), pages 255-264, November.
    2. Alassane DRABO & Christian EBEKE, 2010. "Remittances, Public Health Spending and Foreign Aid in the Access to Health Care Services in Developing Countries," Working Papers 201004, CERDI.
    3. Bharati Basu & Irudaya Rajan, 2018. "Investment Expenditure Behavior of Remittance Receiving Households: An Analysis Using Reserve Bank of India Data," Migration Letters, Migration Letters, vol. 15(3), pages 303-320, July.
    4. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants' Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    5. Randazzo, Teresa & Pavanello, Filippo & De Cian, Enrica, 2023. "Adaptation to climate change: Air-conditioning and the role of remittances," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    6. Demirgüç-Kunt, Asli & Córdova, Ernesto López & Pería, María Soledad Martínez & Woodruff, Christopher, 2011. "Remittances and banking sector breadth and depth: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 95(2), pages 229-241, July.
    7. Bugamelli, Matteo & Paternò, Francesco, 2009. "Do Workers' Remittances Reduce the Probability of Current Account Reversals?," World Development, Elsevier, vol. 37(12), pages 1821-1838, December.
    8. Anzoategui, Diego & Demirgüç-Kunt, Asli & Martínez Pería, María Soledad, 2014. "Remittances and Financial Inclusion: Evidence from El Salvador," World Development, Elsevier, vol. 54(C), pages 338-349.
    9. Ambrosius, Christian, 2012. "Are remittances a substitute for credit? Carrying the financial burden of health shocks in national and transnational households," Discussion Papers 2012/9, Free University Berlin, School of Business & Economics.
    10. Mora-Rivera, Jorge & van Gameren, Edwin, 2021. "The impact of remittances on food insecurity: Evidence from Mexico," World Development, Elsevier, vol. 140(C).
    11. Ambrosius, Christian & Cuecuecha, Alfredo, 2013. "Are Remittances a Substitute for Credit? Carrying the Financial Burden of Health Shocks in National and Transnational Households," World Development, Elsevier, vol. 46(C), pages 143-152.
    12. Aggarwal, Reena & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2006. "Do workers'remittances promote financial development ?," Policy Research Working Paper Series 3957, The World Bank.
    13. Amuedo-Dorantes, Catalina & Mazzolari, Francesca, 2010. "Remittances to Latin America from migrants in the United States: Assessing the impact of amnesty programs," Journal of Development Economics, Elsevier, vol. 91(2), pages 323-335, March.
    14. Zhongwei Xing, 2018. "Development Impacts of Remittances in Agricultural Households: Fiji Experience," Remittances Review, Remittances Review, vol. 3(1), pages 19-49, May.
    15. Taylor, J. Edward & Mora, Jorge, 2006. "Does migration reshape expenditures in rural households? Evidence from Mexico," Policy Research Working Paper Series 3842, The World Bank.
    16. Elisabetta Lodigiani & Luca Marchiori & I-Ling Shen, 2016. "Revisiting the Brain Drain Literature with Insights from a Dynamic General Equilibrium World Model," The World Economy, Wiley Blackwell, vol. 39(4), pages 557-573, April.
    17. I-Ling Shen & Frédéric Docquier & Hillel Rapoport, 2010. "Remittances and inequality: a dynamic migration model," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(2), pages 197-220, June.
    18. Lisa Chauvet & Flore Gubert & Sandrine Mesplé-Somps, 2009. "Are Remittances More Effective Than Aid To Reduce Child Mortality ? An Empirical Assessment using Inter and Intra-Country Data," Working Papers halshs-00966367, HAL.
    19. Calogero Carletto & Jennica Larrison & Çaglar Özden, 2014. "Informing migration policies: a data primer," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 2, pages 9-41, Edward Elgar Publishing.
    20. Naudé, Wim & Siegel, Melissa & Marchand, Katrin, 2015. "Migration, Entrepreneurship and Development: A Critical Review," IZA Discussion Papers 9284, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    migration; remittances; consumption; mexican households./ migración; remesas; consumo; hogares mexicanos.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipn:panora:v:vii:y:2012:i:14:p:121-163. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Juan Marroquín-Arreola (email available below). General contact details of provider: https://edirc.repec.org/data/eeipnmx.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.