Exploring the causes of the slowdown in remittances to Mexico (original) (raw)

2011, Empirical Economics

This paper examines some of the possible reasons for the slowdown of remittances to Mexico. The analysis suggests that improvements in remittance data collection, although important, do not account for the full reduction in the remittances growth rate. The findings show that different proxies for Mexican unemployment in the United States have a negative relationship with remittances to Mexico, while the impact of U.S. output on remittance transfers does not seem to be strong. The study also finds that U.S. housing variables affect remittance transfers, with a particular prominence of the number of houses sold in the United States. Overall, the results seem to suggest that there is not a single reason for the slowdown/decrease of remittances to Mexico, but rather a combination of factors. This fact makes the creation of policy responses to the reduction in migrants' transfers a challenging process.