Do remittances boost economic development? Evidence from Mexican states
Remittances have been promoted as a development tool because they can raise incomes and reduce poverty rates in developing countries. Remittances may also promote development by providing funds that recipients can spend on education or health care or invest in entrepreneurial activities. From a macroeconomic perspective, remittances can boost aggregate demand and thereby GDP as well as spur economic growth. However, remittances may also have adverse macroeconomic impacts by increasing income inequality and reducing labor supply among recipients. We use state-level data from Mexico during 2003–07 to examine the aggregate effect of remittances on employment, wages, unemployment rates, the wage distribution, and school enrollment rates. While employment, wages and school enrollment have risen over time in Mexican states, these trends are not accounted for by increasing remittances. However, two-stage least squares specifications among central Mexican states suggest that remittances shift the wage distribution to the right, reducing the fraction of workers earning the minimum wage or less.
|Date of creation:||2010|
|Date of revision:|
|Note:||Published as: Orrenius, Pia M., Madeline Zavodny, Jesus Cañas and Roberto Coronado (2010), "Do Remittances Boost Economic Development? Evidence From Mexican States," Law and Business Review of the Americas 16 (4): 803-822.|
|Contact details of provider:|| Web page: http://www.dallasfed.org/|
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
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.:
- Rapoport, Hillel & Docquier, Frédéric, 2005.
"The Economics of Migrants’ Remittances,"
IZA Discussion Papers
1531, Institute for the Study of Labor (IZA).
- Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
- Cox-Edwards, Alejandra & Rodríguez-Oreggia, Eduardo, 2009. "Remittances and Labor Force Participation in Mexico: An Analysis Using Propensity Score Matching," World Development, Elsevier, vol. 37(5), pages 1004-1014, May.
- Orrenius, Pia M. & Zavodny, Madeline, 2005.
"Self-selection among undocumented immigrants from Mexico,"
Journal of Development Economics,
Elsevier, vol. 78(1), pages 215-240, October.
- Orrenius, Pia M. & Zavodny, Madeline, 2000. "Self-selection among undocumented immigrants from Mexico," Working Papers 0005, Federal Reserve Bank of Dallas.
- Pia M. Orrenius & Madeline Zavodny, 2001. "Self-selection among undocumented immigrants from Mexico," FRB Atlanta Working Paper 2001-1, Federal Reserve Bank of Atlanta.
- Pablo Acosta & Cesar Calderón & Pablo Fajnzylber & Humberto López, 2006. "Remittances and Development in Latin America," The World Economy, Wiley Blackwell, vol. 29(7), pages 957-987, 07.
- Richard H. Adams, 2006.
"International Remittances and the Household: Analysis and Review of Global Evidence,"
Journal of African Economies,
Centre for the Study of African Economies (CSAE), vol. 15(2), pages 396-425, December.
- Adams, Richard H. Jr., 2007. "International remittances and the household : analysis and review of global evidence," Policy Research Working Paper Series 4116, The World Bank.
- David McKenzie & Hillel Rapoport, 2011.
"Can migration reduce educational attainment? Evidence from Mexico,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 24(4), pages 1331-1358, October.
- McKenzie, David & Rapoport, Hillel, 2006. "Can migration reduce educational attainment ? Evidence from Mexico," Policy Research Working Paper Series 3952, The World Bank.
- 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.
- David Mckenzie & Hillel Rapoport, 2004.
"Network Effects and the Dynamics of Migration and Inequality: Theory and Evidence from Mexico,"
2004-3, Bar-Ilan University, Department of Economics.
- Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
- Pablo Ibarraran & Darren Lubotsky, 2007.
"Mexican Immigration and Self-Selection: New Evidence from the 2000 Mexican Census,"
in: Mexican Immigration to the United States, pages 159-192
National Bureau of Economic Research, Inc.
- Pablo Ibarraran & Darren Lubotsky, 2005. "Mexican Immigration and Self-Selection: New Evidence from the 2000 Mexican Census," NBER Working Papers 11456, National Bureau of Economic Research, Inc.
- Amuedo-Dorantes, Catalina & Georges, Annie & Pozo, Susan, 2008. "Migration, Remittances and Children’s Schooling in Haiti," IZA Discussion Papers 3657, Institute for the Study of Labor (IZA).
- Daniel Chiquiar & Gordon H. Hanson, 2002.
"International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States,"
NBER Working Papers
9242, National Bureau of Economic Research, Inc.
- Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 239-281, April.
- Mishra, Prachi, 2007. "Emigration and wages in source countries: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 82(1), pages 180-199, January.
- Acosta, Pablo & Fajnzylber, Pablo & Lopez, J. Humberto, 2007. "The impact of remittances on poverty and human capital : evidence from Latin American household surveys," Policy Research Working Paper Series 4247, The World Bank.
- Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
- 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.
- McKenzie, David & Sasin, Marcin J., 2007. "Migration, remittances, poverty, and human capital : conceptual and empirical challenges," Policy Research Working Paper Series 4272, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:fip:feddwp:1007. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Chapman)
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.