IDEAS home Printed from https://ideas.repec.org/p/zbw/fubsbe/202113.html
   My bibliography  Save this paper

What drives remittances during a global shock? Evidence from the COVID-19 pandemic in Mexico

Author

Listed:
  • Ambrosius, Christian
  • Campos Vázquez, Raymundo M.
  • Esquivel, Gerardo

Abstract

During a global shock two forces act upon international remittances in opposite directions: income losses among migrants may reduce their ability to send remittances and, at the same time, migrants' concern for their family's wellbeing may prompt them to send more remittances back home. Which of these drivers prevail is an empirical matter. We assemble quarterly data at the subnational level in Mexico to study the behavior of remittances during the Covid-19 pandemic. We estimate elasticities of remittances with respect to employment conditions at both origin and destination places of Mexican migrants. Our results show that destination country conditions have been the main driver of remittances to Mexico, whereas origin country conditions had no discernible effect on remittances during the pandemic. We also show that contractions in consumption in Mexico are associated with reductions in remittances. We conclude that risk-coping via remittances provides limited protection during global crises.

Suggested Citation

  • Ambrosius, Christian & Campos Vázquez, Raymundo M. & Esquivel, Gerardo, 2021. "What drives remittances during a global shock? Evidence from the COVID-19 pandemic in Mexico," Discussion Papers 2021/13, Free University Berlin, School of Business & Economics.
    • Handle: RePEc:zbw:fubsbe:202113
    DOI: 10.17169/refubium-31486
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/240196/1/1767988346.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.17169/refubium-31486?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ambrosius, Christian & Cuecuecha, Alfredo, 2013. "Are Remittances a Substitute for Credit? Carrying the Financial Burden of Health Shocks in National and Transnational Households," World Development, Elsevier, vol. 46(C), pages 143-152.
    2. Gómez-Arteaga, Natalie & Ocampo, José Antonio, 2017. "Social protection systems, redistribution and growth in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    3. Nora Lustig & Valentina Martinez Pabon & Federico Sanz & Stephen D. Younger, 2020. "The Impact of COVID-19 Lockdowns and Expanded Social Assistance on Inequality, Poverty and Mobility in Argentina, Brazil, Colombia and Mexico," Working Papers 558, ECINEQ, Society for the Study of Economic Inequality.
    4. Ibrahim Sirkeci & Jeffrey H. Cohen & Dilip Ratha, 2012. "Migration and Remittances during the Global Financial Crisis and Beyond," World Bank Publications - Books, The World Bank Group, number 13092.
    5. -, 2017. "Revista CEPAL no. 122," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    6. Adams Jr., Richard H. & Cuecuecha, Alfredo, 2010. "Remittances, Household Expenditure and Investment in Guatemala," World Development, Elsevier, vol. 38(11), pages 1626-1641, November.
    7. Anna Mikusheva & Brian P. Poi, 2006. "Tests and confidence sets with correct size when instruments are potentially weak," Stata Journal, StataCorp LP, vol. 6(3), pages 335-347, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ana Paula Goerne Luna & Jaime Lara Lara & Luz Daniela Montañez Martínez & Regina Saracho Cueto & Alonso Torre De Silva & Iliana Michelle Zaldivar Galindo, 2023. "COVID-19 and remittances to Mexican states," Economics and Business Letters, Oviedo University Press, vol. 12(1), pages 33-39.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ambrosius, Christian & Cuecuecha, Alfredo, 2014. "Do remittances increase borrowing?," Discussion Papers 2014/19, Free University Berlin, School of Business & Economics.
    2. Narges Ebadi & Davod Ahmadi & Ibrahim Sirkeci & Hugo Melgar-Quiñonez, 2018. "The Impact of Remittances on Food Security Status in the Global South," Remittances Review, Remittances Review, vol. 3(2), pages 135-150, October.
    3. Chinedu Obi & Fabio Bartolini & Marijke D’Haese, 2020. "International migration, remittance and food security during food crises: the case study of Nigeria," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(1), pages 207-220, February.
    4. Liliana Simionescu & Dalina Dumitrescu, 2017. "Migrants Remittances Influence on Fiscal Sustainability in Dependent Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(46), pages 640-640, August.
    5. Ambrosius, Christian, 2019. "Government reactions to private substitutes for public goods: Remittances and the crowding-out of public finance," Journal of Comparative Economics, Elsevier, vol. 47(2), pages 396-415.
    6. Christian Ambrosius, 2016. "Remittances and Financial Access: Is There Really a Link and for Whom? Evidence from Mexican Household Data," The World Economy, Wiley Blackwell, vol. 39(7), pages 964-982, July.
    7. Christian Ambrosius & Barbara Fritz & Ursula Stiegler, 2014. "Remittances for Financial Access: Lessons from Latin American Microfinance," Development Policy Review, Overseas Development Institute, vol. 32(6), pages 733-753, November.
    8. Ambrosius, Christian & Cuecuecha, Alfredo, 2016. "Remittances and the Use of Formal and Informal Financial Services," World Development, Elsevier, vol. 77(C), pages 80-98.
    9. Kazi Abdul Mannan & Khandaker Mursheda Farhana, 2023. "Digital Financial Inclusion and Remittances: An Empirical Study on Bangladeshi Migrant Households," FinTech, MDPI, vol. 2(4), pages 1-18, October.
    10. Amarante, Verónica, 2022. "Fortalecimiento de los sistemas de protección social de la región: aprendizajes a partir de la pandemia de COVID-19," Documentos de Proyectos 47830, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    11. Gabriella Berloffa & Sara Giunti, 2017. "Remittances and healthcare consumption: human capital investment or responses to shocks? Evidence from Peru," DEM Working Papers 2017/12, Department of Economics and Management.
    12. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.
    13. Michael E. Cummings & Alan Gamlen, 2019. "Diaspora engagement institutions and venture investment activity in developing countries," Journal of International Business Policy, Palgrave Macmillan, vol. 2(4), pages 289-313, December.
    14. Li, Linfei & Khan, Sufyan Ullah & Guo, Chenhao & Huang, Yanfen & Xia, Xianli, 2022. "Non-agricultural labor transfer, factor allocation and farmland yield: Evidence from the part-time peasants in Loess Plateau region of Northwest China," Land Use Policy, Elsevier, vol. 120(C).
    15. Aggarwal, Reena & Demirgüç-Kunt, Asli & Pería, Maria Soledad Martínez, 2011. "Do remittances promote financial development?," Journal of Development Economics, Elsevier, vol. 96(2), pages 255-264, November.
    16. Jeffrey H. Cohen, 2017. "Editorial: Advancing Scholarship on Remittances," Remittances Review, Remittances Review, vol. 2(1), pages 1-4, May.
    17. Driouchi, Ahmed & Zouag, Nada, 2010. "Internal Mobility and Likelihood of Skill Losses in Localities of Emigration: Theory and Preliminary Empirical Application to Some Developing Economies," MPRA Paper 21799, University Library of Munich, Germany, revised 01 Apr 2010.
    18. Kabinet Kaba & Mahamat Moustapha, 2021. "Remittances and firm performance in sub-Saharan Africa: evidence from firm-level data," Working Papers DT/2021/07, DIAL (Développement, Institutions et Mondialisation).
    19. Andaleeb Rahman & Sumit Mishra, 2020. "Does Non-farm Income Affect Food Security? Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 56(6), pages 1190-1209, June.
    20. Randazzo, Teresa & Piracha, Matloob, 2019. "Remittances and household expenditure behaviour: Evidence from Senegal∗," Economic Modelling, Elsevier, vol. 79(C), pages 141-153.

    More about this item

    Keywords

    Migration; COVID-19; Remittances; Consumption; Mexico;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:fubsbe:202113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwfubde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.