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The Impact of the 1996 US Immigration Policy Reform (IIRIRA) on Mexican Migrants' Remittances

Author

Listed:
  • Vaira-Lucero, Matias

    (Macquarie University, Sydney)

  • Nahm, Daehoon

    (Macquarie University, Sydney)

  • Tani, Massimiliano

    (University of New South Wales)

Abstract

This paper investigates the effect of the US Illegal Immigrant Reform and Immigrant Responsibility Act of 1996 (IIRIRA) on the remitting patterns of Mexican immigrants. Using data from the Mexican Migration Project (MMP128), we find that a significant effect on remittance flows from illegal migrants took place after the implementation of the IIRIRA. This is consistent with the hypothesis that illegal immigrants are risk-averse agents who transfer more money to their home country as a mechanism to insure themselves against higher degrees of uncertainty within their host countries. Furthermore, this finding confirms previous research that conditions and policies in the host country affect migrants' remitting behaviour, and migrants' motivations are not only altruistic but also self-interested. Given that migrants' remittances and their savings are important sources of capital formation in many sending countries and of savings in the countries that host them, a better understanding of the effect that migration policies have on remittance flows can lead to more informed policies that can transcend the home security aspects that often dominate discussions about illegal migration.

Suggested Citation

  • Vaira-Lucero, Matias & Nahm, Daehoon & Tani, Massimiliano, 2012. "The Impact of the 1996 US Immigration Policy Reform (IIRIRA) on Mexican Migrants' Remittances," IZA Discussion Papers 6546, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp6546
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    References listed on IDEAS

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    1. M. Piracha & Y. Zhu, 2012. "Precautionary savings by natives and immigrants in Germany," Applied Economics, Taylor & Francis Journals, vol. 44(21), pages 2767-2776, July.
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    4. Catalina Amuedo-Dorantes & Susan Pozo, 2002. "Precautionary Saving by Young Immigrants and Young Natives," Southern Economic Journal, John Wiley & Sons, vol. 69(1), pages 48-71, July.
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    9. El-Sakka, M. I. T. & McNabb, Robert, 1999. "The Macroeconomic Determinants of Emigrant Remittances," World Development, Elsevier, vol. 27(8), pages 1493-1502, August.
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    12. Catalina Amuedo-Dorantes & Cynthia Bansak, 2006. "Money Transfers among Banked and Unbanked Mexican Immigrants," Southern Economic Journal, John Wiley & Sons, vol. 73(2), pages 374-401, October.
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    Cited by:

    1. Catalina Amuedo-Dorantes & Thitima Puttitanun, 2014. "Remittances and immigration enforcement," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-26, December.
    2. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.

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    More about this item

    Keywords

    remittances; legal status; uncertainty; policy reform; illegal migrants; Mexico; migration policy;
    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
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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