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Migrant Remittances During a Global Shock: Evidence From the COVID-19 Pandemic in Mexico

Author

Listed:
  • Ambrosius Christian

    (Freie Universität Berlin, Institute for Latin American Studies and School of Business and Economics, Rüdesheimer Str. 52-54, 14197 Berlin)

  • Campos-Vázquez Raymundo M.

    (El Colegio de México, Centro de Estudios Económicos, Carr. Picacho Ajusco 20, Col. Ampliación Fuentes del Pedregal, 14110, Ciudad de México, México.)

  • Esquivel Gerardo

    (El Colegio de México, Presidencia, Carr. Picacho Ajusco 20, Col. Ampliación Fuentes del Pedregal, 14110, Ciudad de México, México)

Abstract

During a global shock two forces act upon international remittances in opposite directions: income losses among migrants may reduce their ability to send remittances and, at the same time, migrants’ concern for their family's wellbeing may prompt them to send more remittances back home. Which of these drivers prevail is an empirical matter. We assemble quarterly data at the subnational level in Mexico to study the behavior of remittances during the Covid-19 pandemic. We estimate elasticities of remittances with respect to employment conditions at both origin and destination places of Mexican migrants. Our results show that destination country conditions have been the main driver of remittances to Mexico, whereas origin country conditions had no discernible effect on remittances during the pandemic. We also show that contractions in consumption in Mexico are associated with reductions in remittances. We conclude that risk-coping via remittances provides limited protection during global crises.

Suggested Citation

  • Ambrosius Christian & Campos-Vázquez Raymundo M. & Esquivel Gerardo, 2023. "Migrant Remittances During a Global Shock: Evidence From the COVID-19 Pandemic in Mexico," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 14(1), pages 1-22, January.
    • Handle: RePEc:vrs:izajdm:v:14:y:2023:i:1:p:22:n:1
    DOI: 10.2478/izajodm-2023-0002
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    References listed on IDEAS

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    1. Jørgen Carling, 2008. "The determinants of migrant remittances," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 582-599, Autumn.
    2. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
    3. Veronica Guerrieri & Guido Lorenzoni & Ludwig Straub & Iván Werning, 2022. "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?," American Economic Review, American Economic Association, vol. 112(5), pages 1437-1474, May.
    4. Anna Mikusheva & Brian P. Poi, 2006. "Tests and confidence sets with correct size when instruments are potentially weak," Stata Journal, StataCorp LP, vol. 6(3), pages 335-347, September.
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    Cited by:

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    More about this item

    Keywords

    Migration; COVID-19; Remittances; Consumption; Mexico;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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