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The Effect of Workers’ Remittances on Poverty in Mexico: A Regional Analysis

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  • Coon, Michael

Abstract

This study estimates the impact of income remittances on poverty rates by estimating household income under the counter-factual scenario that migration does not occur. Estimation of the counter-factual is performed at the national level, as well as across two separate sub-national groupings of states, first according to historical migration patterns, then according to current migration intensity. Findings indicate that the ability of remittances to reduce poverty levels varies between groups, and across differing poverty thresholds. I find that remittances generally tend to reduce poverty in recipient communities. However, in some cases, I find that remittances lead to an increase in the poverty rate.

Suggested Citation

  • Coon, Michael, 2012. "The Effect of Workers’ Remittances on Poverty in Mexico: A Regional Analysis," MPRA Paper 61388, University Library of Munich, Germany, revised 06 Oct 2014.
  • Handle: RePEc:pra:mprapa:61388
    as

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    File URL: https://mpra.ub.uni-muenchen.de/61388/1/MPRA_paper_61388.pdf
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    References listed on IDEAS

    as
    1. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    2. Pablo Ibarraran & Darren Lubotsky, 2007. "Mexican Immigration and Self-Selection: New Evidence from the 2000 Mexican Census," NBER Chapters,in: Mexican Immigration to the United States, pages 159-192 National Bureau of Economic Research, Inc.
    3. Toxopeus, Helen S. & Lensink, Robert, 2007. "Remittances and Financial Inclusion in Development," WIDER Working Paper Series 049, World Institute for Development Economic Research (UNU-WIDER).
    4. Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
    5. Cuong Nguyen Viet, 2008. "Do Foreign Remittances Matter to Poverty and Inequality? Evidence from Vietnam," Economics Bulletin, AccessEcon, vol. 15(1), pages 1-11.
    6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    7. 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.
    8. repec:ebl:ecbull:v:15:y:2008:i:1:p:1-11 is not listed on IDEAS
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    More about this item

    Keywords

    Remittances; Poverty; Mexico;

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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