Migration and Remittances Effects on Consumption of the Poorest: The Mexican Case

Abstract

ResumenEste trabajo presenta evidencia empírica sobre el efecto de las remesas en los patrones de gasto de hogares rurales que viven en algunas de las zonas más pobres de México. Utilizando datos de las encuestas del programa Progresa-Oportunidades de los años 1997 al 2000, se desarrolla un modelo econométrico que considera el proceso de autoselección involucrado en el fenómeno migratorio, para estimar el impacto que tiene la probabilidad de recibir remesas, internas y externas, en los patrones de gasto de estos hogares. Los resultados señalan que existen efectos signifi cativos en ciertas categorías de gasto. Dichos hallazgos indican que los hogares con mayor probabilidad de recibir remesas tienen mayor propensión a gastar en categorías de gasto relacionadas con la inversión física y humana. The authors would like to thank the Hewlett Foundation and the MacMillan Center at Yale University for their fi nancial support to this work. We specially thank to professor Gustav Ranis for his eff orts coordinating the empirical studies prepared for the Global Citizen Project and the working group formed at the Economic Growth Center of Yale University for their valuable comments and observations. JOSÉ J. MORA / JESÚS ARELLANO 122 AbstractIn this work we present empirical evidence to test for the impact of remitt ances on expenditure patt erns in rural Mexican households located in poor areas. Using data from the Progresa-Oportunidades program from 1997 to 2000, we develop an econometric approach that deals with the selection mechanism aff ecting migration decisions, to estimate the impact that the probability of receiving remitt ances, internal and external, has on expenditure patt erns of rural poor households. Our fi ndings indicate that there are signifi cant eff ects on some expenditure categories. Household with higher probabilities of receiving internal and external remitt ances are more likely to spend in expenditure categories like physical and human investments.