Nov 072011

Remittances (the funds sent by migrant workers back to their families) are a major international financial flow into Mexico. Remittances bring more than 20 billion dollars a year into the economy, an amount equivalent to 2.5% of Mexico’s GDP.

On a per person basis, Mexico receives more worker remittances than any other major country in the world. An estimated 20% of Mexican residents regularly receive some financial support from relatives working abroad. Such remittances are the mainstay of the economies of many Mexican families, especially in rural areas of Durango, Zacatecas, Guanajuato, Jalisco and Michoacán.

The map below accompanied a 2007 Atlantic Magazine report by Matthew Quirk entitled “The Mexican Connection: mass migration has left many towns in Mexico half-empty, but much wealthier.” The map is based in part on work by Raúl Hernández-Coss for the World Bank. The map and article provide an excellent starting-point for considering the basic patterns and impacts associated with remittance flows between the USA and Mexico. The article is an easy-to-read introduction to many of the key issues connected to remittances.

The data used for the map come from the US Census and from the registration records held by Mexican consulates in the USA.

Summary of migration flows between Mexico and USA

Summary of migration flows between Mexico and USA; click to enlarge Source: Atlantic Magazine.

The causes and consequences of mass out-migration and large remittance payments are varied, and sometimes disputed. For background, causes and trends, try:

For some impacts of Mexican migrants on the USA (of varying importance), see:

The four subtitles used in the Atlantic Magazine article are useful reminders of some of the other major aspects of international migration from Mexico. Again, links are given to previous Geo-Mexico posts which look at good examples.

“Branching Out” emphasizes the links that exist between communities, often referred to as “migration channels”.

“The Hollow States” identifies the five major “states of origin”—Guanajuato, Jalisco, Michoacán, San Luis Potosí and Zacatecas—which receive almost 50% of all remittance payments.

“Staying Put” points out that improved economic conditions in Mexico in recent decades, have restricted out-migration from certain areas, especially the border region. Recent developments in Mexico’s war on drugs have, however, led to an increase in the number of border residents moving to bigger, safer cities further south, or seeking to emigrate to the USA.

“Community Development” stresses the important link between “hometown associations” (groupings, found in many US cities, of Mexican migrants sharing a common area of origin) and their related villages and towns in Mexico. Many community development projects in areas of high out-migration have been financed by remittances. In many cases, the three levels of Mexican government—municipal, state and federal—provide matching funds for such projects, meaning that remittances only pay for 25% of the total costs.

In future posts, we will examine some of these aspects of remittances in more detail, and take a much closer look at the precise mechanisms used to make the international financial transfers involved.

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