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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 for the Study of Labor (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. Mathias Sinning, 2011. "Determinants of savings and remittances: empirical evidence from immigrants to Germany," Review of Economics of the Household, Springer, vol. 9(1), pages 45-67, March.
    5. Francisco L. Rivera-Batiz, 1999. "Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 91-116.
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    Cited by:

    1. Catalina Amuedo-Dorantes & Thitima Puttitanun, 2014. "Remittances and immigration enforcement," IZA Journal of Migration, 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.

    More about this item

    Keywords

    remittances; legal status; uncertainty; policy reform; illegal migrants; Mexico; migration policy;

    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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