Beyond Remittances: The Effects of Migration on Mexican Households

The number of international migrants in the world increased by 21 million between 1990 and 2000, a 14 percent increase, resulting in 175 million people living in a country outside their birth (United Nations 2002). Remittances from migrants have grown rapidly over the same time, with developing countries receiving $126 billion in 2004 (Ratha 2005). The United States holds the largest stock of immigrants and is the source of the largest share of remittances. Mexicans are by far the largest immigrant group in the United States, and are estimated to amount to approximately 15 percent of Mexico’s working age population (Mishra 2003). The scale and growth in remittances has attracted increased intention regarding the development impact of these flows (for example, Ratha 2005; International Monetary Fund 2005). However, identifying the effects of remittances on households is difficult, because both the decision to migrate, and the decision among migrants of how much to remit, are likely to be related to the outcomes of interest. The chapter estimates the overall impact of Mexican migration to the United States on several household outcomes, and shows that migration has a number of impacts that are distinct from the direct effects of remittances. I draw on the findings of recent research I have conducted with Nicole Hildebrandt and Hillel Rapoport on the impact of migration on child health (Hildebrandt and McKenzie forthcoming), the probability of other community members migrating and on inequality in the sending community (McKenzie and Rapoport 2004), and education (McKenzie and Rapoport 2005).