Mexican migration to the United States is not a new phenomenon, but through increased globalization, labor migration became more flexible and more common. With the rise in migration flows, remittances also experienced a considerable growth. For a long time, these large flows of money have been mostly disregarded. Today they are one of the largest financial flows to developing countries. Therefore, in the last years, more and more research on this topic popped up. Remittance flows are considered to be relatively stable. In the case of Mexico, they seem to behave in a countercyclical way and are ra-ther compensatory than opportunistic in nature. Their mostly altruistic motivation and the end use of remittances influences the economic and social impacts they have on the overall country.
There are several channels through which remittances may directly or indirectly impact economic development. In literature, there are primarily two extreme positions present. The positive approach is that remittances enhance investment in physical and human capital, thus promote economic growth. Remittances are considered to have a positive impact on Mexico´s overall financial development and capital accumulation. Further-more, the balancing effect on the balance of payments is positive, since trade deficits can be counterbalanced through the entry of foreign currency. In contrast, advocators of the negative approach say that remittances seem not to have an overall positive impact on economic growth, because their negative impacts outstrip the positive ones. A real exchange rate appreciation caused by remittances that lead to a less competitive tradable sector (Dutch disease effect) is one of the main negative effects associated with remit-tance flows. Furthermore, remittances are considered to cause moral hazard problems, which lead recipients to neglect labor market efforts and spend more time on leisure. Moreover, remittances are predominantly used for consumption rather than for produc-tive investment, thus not promoting long-run economic growth.
Concerning the social impacts, scientists agree on the positive effect remittances have on poverty reduction. In contrast, remittances seem to have an equalizing effect on in-come distribution in regions with long migration history. But, non-migration seems to equalize income distribution even more.
The difficulty is to benefit the most from remittances´ positive impacts and to reduce their negative consequences in order to ensure their developmental effect.
| Identifer | oai:union.ndltd.org:UDLA-Thesis/oai:ciria.udlap.mx:u-dl-a/tesis/5051026605581 |
| Date | 16 April 2013 |
| Creators | Raiser, Katrin |
| Contributors | Dra. Elizabeth Salamanca Pacheco, Dr. Ditmar Hilpert |
| Publisher | Universidad de las Américas Puebla |
| Source Sets | UDLA-Thesis |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation, Tesis |
| Format | application/pdf, text/html |
| Coverage | Licenciatura |
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