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Does migration reshape expenditures in rural households? Evidence from Mexico

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  • Taylor, J. Edward
  • Mora, Jorge

Abstract

Migration reshapes rural economies in ways that may go beyond the contribution of migrant remittances to household income. Consumption and investment expenditures by migrant-sending households may transmit some of the impacts of migration to others inside and outside the rural economy, and they also may shape the potential effects of migration within the source household. Numerous studies have attempted to quantify the impact of migrant remittances on expenditures in migrant-sending households following one of two approaches. The first asks how migrant remittances are spent. It has the advantage of being simple but the significant disadvantage of ignoring the fungibility of income from migrant and nonmigrant sources. Remittances almost certainly have indirect effects on expenditures by way of their contribution to households'total budgets. The second uses a regression approach that considers remittances as an explanatory variable, in addition to total income and other controls, in a household expenditure demand system. It has the advantage of enabling one to test whether remittances affect expenditures in ways that are independent of their contribution to total income. But it does not take into account other ways, besides remittances, in which migration may influence expenditure patterns in households with migrants. It also may suffer from econometric bias resulting from the endogeneity of migration and remittance receipts. The same variables may simultaneously affect both remittances and household expenditures, and unless one controls for this, biased estimates may result.

Suggested Citation

  • Taylor, J. Edward & Mora, Jorge, 2006. "Does migration reshape expenditures in rural households? Evidence from Mexico," Policy Research Working Paper Series 3842, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3842
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    References listed on IDEAS

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    Cited by:

    1. Démurger, Sylvie & Wang, Xiaoqian, 2016. "Remittances and expenditure patterns of the left behinds in rural China," China Economic Review, Elsevier, vol. 37(C), pages 177-190.
    2. Mazhar Yasin MUGHAL & Junaid AHMED, 2015. "Great Expectations? Remittances and Asset Accumulation in Pakistan," Working Papers 2014-2015_6, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Jan 2015.
    3. Michael Lokshin & Mikhail Bontch-Osmolovski & Elena Glinskaya, 2010. "Work-Related Migration and Poverty Reduction in Nepal," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 323-332, May.
    4. Dilip Ratha & Sonia Plaza, 2011. "Diaspora for Development in Africa," World Bank Publications, The World Bank, number 2295.
    5. Iuliia Kuntsevych, 2017. "Remittances, Spending and Political Instability in Ukraine," CERGE-EI Working Papers wp583, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    6. Eduardo Rodríguez-Montemayor & Pablo M. García, 2009. "A Primer of International Migration: The Latin American Experience," IDB Publications (Working Papers) 2544, Inter-American Development Bank.
    7. Amuedo-Dorantes, Catalina & Pozo, Susan, 2013. "Remittances and Portfolio Values: An Inquiry using Immigrants from Africa, Europe, and the Americas," World Development, Elsevier, vol. 41(C), pages 83-95.
    8. Eduardo Rodríguez-Montemayor & Pablo M. García, 2009. "A Primer of International Migration: The Latin American Experience," IDB Publications (Working Papers) 9327, Inter-American Development Bank.
    9. Mere, Francisco, 2007. "Rural Migration in Mexico - An Overview," Agricultural Outlook Forum 2007 8082, United States Department of Agriculture, Agricultural Outlook Forum.
    10. Junaid Ahmed & Mazhar Mughal, 2014. "How do consumption patterns of foreign and domestic remittance recipients and non recipients compare? Evidence from Pakistan," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 160, Courant Research Centre PEG.
    11. Farai Jena, 2015. "Do Migrant Remittances Affect Household Purchases of Physical Investments and Durable Goods? Evidence for Kenya," Working Paper Series 7915, Department of Economics, University of Sussex.
    12. Carletto, Calogero & Covarrubias, Katia & Maluccio, John A., 2011. "Migration and child growth in rural Guatemala," Food Policy, Elsevier, vol. 36(1), pages 16-27, February.
    13. Lozano-Ascencio, Fernando & Huesca, Luis & Valdivia, Marcos, 2010. "Contribución de las remesas a los ingresos públicos en México
      [Contribution of remittances to public income in Mexico]
      ," MPRA Paper 27789, University Library of Munich, Germany, revised 01 Jan 2010.
    14. repec:hal:cesptp:hal-00907035 is not listed on IDEAS
    15. repec:bla:ecorec:v:93:y:2017:i::p:122-143 is not listed on IDEAS
    16. repec:eac:articl:06/15 is not listed on IDEAS
    17. Bui, Thi Thanh Nga & Le, Thi Thanh Ngan & Daly, Kevin James, 2015. "Microlevel impacts of remittances on household behavior: Viet Nam case study," Emerging Markets Review, Elsevier, vol. 25(C), pages 176-190.
    18. Nguyen Viet Cuong & Daniel Mont, 2012. "Economic impacts of international migration and remittances on household welfare in Vietnam," International Journal of Development Issues, Emerald Group Publishing, vol. 11(2), pages 144-163, June.
    19. Kristin Göbel, 2013. "Remittances, expenditure patterns, and gender: parametric and semiparametric evidence from Ecuador," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-19, December.
    20. Gabriella Berloffa & Sara Giunti, 2017. "Remittances and healthcare consumption: human capital investment or responses to shocks? Evidence from Peru," DEM Working Papers 2017/12, Department of Economics and Management.
    21. Quentin Wodon & Andrea Liverani & George Joseph & Nathalie Bougnoux, 2014. "Climate Change and Migration : Evidence from the Middle East and North Africa," World Bank Publications, The World Bank, number 18929.
    22. Garcia, Pablo M & Rodriguez-Montemayor, Eduardo, 2010. "A primer of international migration: The Latin American experience and a proposal for a research agenda," MPRA Paper 24147, University Library of Munich, Germany.
    23. Ana Isabel Lopez Garcia, 2016. "State Healthcare and the Impact of Remittances on Turnout in Mexico," Remittances Review, Transnational Press London, UK, vol. 1(1), pages 65-104, October.

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    Keywords

    Investment and Investment Climate; Economic Theory&Research; Housing&Human Habitats; Remittances; Consumption;

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