Migration, remittances, and sustainable community development in Mexico

The development impact of remittances in Mexico at all scales if of particular interest for government and development institutions given the growing influence these financial flows have on the macro economy as well as on communities and households. The existing literature frames migrants use of remittances as primarily focused on consumption, although there are strong voices arguing that expenditure on health care, education, and housing contribute to economic productivity. Based on a framework that examines the individual, household, community and macroeconomic factors associated with the use of remittances, this study utilizes development paradigms to examine how these factors influence Mexican migrant remittance investment. Utilizing survey data from 3395 migrant heads of households from the Mexican Migration Project 107 (MMP107), this study developed three different random effects logit models based on three definitions of productive use, stratified into urban and rural cases. The dependent variables were based on the literature's productive use definition as well as the basic needs and sustainable development paradigms. The findings from this study highlight that migrants invest their remittances in basic needs such as health care, housing and education rather than consumption. There were important differences between the factors that influenced migrants from rural vs. urban areas. The rural model for productive investment of remittances for example highlighted a strong positive association with the level of education in the community. The primary factors associated with the investment of remittances were economic assets, wealth, and marital status. However, social networks, education, and community participation also influenced remittances investment. The study findings have important implications for both future research and policymaking. The findings suggest that in order for remittances to be a catalyst for economic growth, addressing the recipients' basic needs is an essential prerequisite.