Skip to main content

Advertisement

SpringerLink
Log in

Migrant Remittances and Demand for Redistribution

  • Published:
Studies in Comparative International Development Aims and scope Submit manuscript

Abstract

The literature on the political economy of remittances largely agrees that as households receive income from migrants abroad they will be less dependent on government goods and patronage. The underlying assumption is that remittance inflows are stable and increasing. The global economic recession of 2008 and 2009 led to major declines in remittance inflows. This paper asks two different but related questions: (1) Do remittance recipients support redistribution? and (2) Do preferences for redistribution change following a negative shock to remittances? Using three waves of survey data, I find that remittance recipients diverge from non-recipients in favoring redistribution following the sudden decline in remittances. I test for possible mechanisms such as dependence on remittances and relative income levels to explain this change in preferences. I find that remittance recipients who are more dependent on remittances or not inclined to emigrate are more likely to favor redistribution following the negative shock.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Similar content being viewed by others

Notes

  1. Frankel (2011) shows how remittance levels rise and decline responding to home-country economic performance. O'Mahony (2013) and Nyblade and O'Mahony (2014) show the remittance inflows rise during election years. Tertytchnaya et al. (2018) use panel data to analyze remittance fluctuations on incumbent approval in Kyrgyzstan.

  2. See Mosley and Singer (2015).

  3. Tertytchnaya et al. (2018) is an exception.

  4. I thank the anonymous reviewer for raising this point.

  5. In Latin America and the Caribbean, Honduras is the highest ranked in remittance inflows as a percentage of GDP. El Salvador (2nd), Guatemala (7th), and the Dominican Republic (9th) are in the top 10. Nicaragua (6th) has the majority of its emigrants residing in neighboring Costa Rica. The other countries in the top 10 are not included in past surveys of LAPOP: Guyana (2nd), Haiti (4th), Jamaica (5th), and Grenada (8th) (Ratha et al. 2011: 28).

  6. Paraguayan migrants tend to settle in Brazil and Argentina (Ratha et al. 2011: 203).

  7. See Fajnzylber and Lopez (2008) and Ratha et al. (2011).

  8. Figure 6 in the Appendix shows the full distribution of the responses with the original scale for each country-year in the sample.

  9. Latinobarometer only asks about remittances in 2009.

  10. There was no data for 2008 in Honduras. I used data for 2007 as a proxy for 2008 in Honduras. This means that the 2-year change in 2010 is based on 2007.

  11. The amount of remittances relative to income or dependence on remittances would be ideal variables for this mechanism, but such questions were not asked in the LAPOP surveys. Dependence is not asked in 2012 in all countries. Amounts are not asked at all.

  12. By non-employed, I mean those who are currently not working. I do not differentiate between those not working and those not working but seeking employment.

  13. The surveys do not ask about job loss for every country-year.

  14. I also ran the same analyses calculating income distance from the median for each country-year. The results are consistent.

  15. One worry is that the national mean changes over time, especially during economic crisis. What is important for my analysis is comparing remittance receivers and non-receivers, and their respective distance to the national mean in a given year.

References

  • Abdih Y, Chami R, Dagher J, Montiel P. Remittances and institutions: are remittances a curse? World Dev. 2011;40:657–66.

    Article  Google Scholar 

  • Acosta P, Calderon C, Fajnzylber P, Lopez H. What is the impact of international remittances on poverty and inequality in Latin America?. World Development 2008;36(1):89–114.

  • Adida CL, Girod DM. Do migrants improve their hometowns? Remittances and access to public services in Mexico, 1995-2000. Comp Polit Stud. 2011;44:3–27.

    Article  Google Scholar 

  • Ahmed FZ. The perils of unearned foreign income: aid, remittances, and government survival. Am Polit Sci Rev. 2012;106:146–65.

    Article  Google Scholar 

  • Ahmed FZ. Remittances and incumbency: theory and evidence. Econ Polit. 2017;29:22–47.

    Article  Google Scholar 

  • Aparicio FJ, Meseguer C. Collective remittances and the state: the 3× 1 program in Mexican municipalities. World Dev. 2012;40:206–22.

    Article  Google Scholar 

  • Aristy-Escuder J, Cabrera M, Moreno-Dodson B, Sanchez-Martin M, et al. Fiscal policy and redistribution in the Dominican Republic. The distributional impact of fiscal policy: experience from developing countries. 2016

  • Bravo J. The political economy of Mexico-US migration. Ph.D. dissertation, Duke University; 2008.

  • Bravo J. Credit where credit is due? Remittances, economic assessments, and presidential approval in Latin America. Working Paper. 2012. Retrieved from http://princeton.edu/politics/about/file-repository/public/credit.where.credit.is.due.W.pdf.

  • Burgess K. Migrants, remittances, and politics: loyalty and voice after exit. Fletcher Forum World Aff. 2012;36:43–55.

    Google Scholar 

  • Clarke G, Wallsten S. Do remittances protect households in developing countries against shocks? Evidence from a natural disaster in Jamaica: World Bank; 2004.

  • Diaz-Cayeros A, Magaloni B, Weingast BR. “Tragic brilliance: Equilibrium hegemony and democratization in Mexico.” Hoover Institution, Stanford University. 2003.

  • Doyle D. Remittances and social spending. Am Polit Sci Rev. 2015;109:785–802.

    Article  Google Scholar 

  • Duquette-Rury L. Collective remittances and transnational coproduction: the 3× 1 program for migrants and household access to public goods in Mexico. Stud Comp Int Dev. 2014;49:112–39.

    Article  Google Scholar 

  • ECLAC. Economic Commission for Latin America and the Caribbean. Data and statistics. 2017. Retrieved from http://www.cepal.org/en/datos-y-estadisticas

  • Edmonds-Poli E, Shirk DA. Contemporary Mexican politics: Rowman & Littlefield; 2015.

  • Escribà-Folch A, Meseguer C, Wright J. Remittances and democratization. Int Stud Q. 2015;59:571–86.

    Article  Google Scholar 

  • Escribà-Folch A, Meseguer C, Wright J. Remittances and protest in dictatorships. Am J Polit Sci. 2018;62:889–904.

    Article  Google Scholar 

  • Fajnzylber P, Lopez JH, editors. Remittances and development: lessons from Latin America. Washington, DC: World Bank; 2008.

    Google Scholar 

  • Frankel J. Are bilateral remittances countercyclical? Open Econ Rev. 2011;22:1–16.

    Article  Google Scholar 

  • Germano R. Migrants’ remittances and economic voting in the Mexican countryside. Elect Stud. 2013;32:875–85.

    Article  Google Scholar 

  • Goodman GL, Hiskey JT. Exit without leaving: political disengagement in high migration municipalities in Mexico. Comp Polit. 2008;40:169–88.

    Article  Google Scholar 

  • Inchauste G, Stein E. Remittances and poverty during an economic crisis: Honduras and El Salvador: Springer; 2013.

  • Iskander NN. Creative state: forty years of migration and development policy in Morocco and Mexico: Cornell University Press; 2010.

  • Iversen T, Soskice D. An asset theory of social policy preferences. Am Polit Sci Rev. 2001;95:875–94.

    Article  Google Scholar 

  • Kapur D. Diaspora, development, and democracy: the domestic impact of international migration from India: Princeton University Press; 2010.

  • LAPOP. The AmericasBarometer by the Latin American Public Opinion Project (LAPOP). Version 3.0. 2016. Retrieved from www.LapopSurveys.org.

  • Leblang DA, Helms B, Iadarola A, Satpathy A, Hunt K, Brough R, Xu E, Rao M. Temporary Protected Status and Immigration to the United States. 2018. Available at SSRN: https://ssrn.com/abstract=3206009 or https://doi.org/10.2139/ssrn.3206009.

  • Lupu N, Pontusson J. The structure of inequality and the politics of redistribution. Am Polit Sci Rev. 2011;105:316–36.

    Article  Google Scholar 

  • Margalit Y. Explaining social policy preferences: evidence from the great recession. Am Polit Sci Rev. 2013;107:80–103.

    Article  Google Scholar 

  • Martínez Franzoni J. In: Sánchez-Ancochea D, Marti i Puig S, editors. Social policy in Central America: stubborn legacies, positive yet limited changes: Routledge; 2014.

  • Massey DS, Arango J, Hugo G, Kouaouci A, Pellegrino A, Taylor JE. Theories of international migration: a review and appraisal. Popul Dev Rev. 1993:431–66.

  • Meltzer AH, Richard SF. A rational theory of the size of government. J Polit Econ. 1981;89:914–27.

    Article  Google Scholar 

  • Meseguer C, Lavezzolo S, Aparicio J. Financial remittances, trans-border conversations, and the state. Comp Migr Stud. 2016;4:13.

    Article  Google Scholar 

  • Moene KO, Wallerstein M. Inequality, social insurance, and redistribution. Am Polit Sci Rev. 2001;95:859–74.

    Article  Google Scholar 

  • Mosley L, Singer DA. Migration, labor, and the international political economy. Annu Rev Polit Sci. 2015;18:283–301.

    Article  Google Scholar 

  • Nyblade B, O'Mahony A. Migrants’ remittances and home country elections: cross-national and subnational evidence. Stud Comp Int Dev. 2014;49:44–66.

    Article  Google Scholar 

  • OECD. Revenue statistics in Latin America and the Caribbean 2016: OECD Publishing; 2016.

  • O'Mahony A. Political investment: remittances and elections. Br J Polit Sci. 2013;43:799–820.

    Article  Google Scholar 

  • Ondetti G. International migration and social policy underdevelopment in the Dominican Republic. Glob Soc Pol. 2012;12:45–66.

    Article  Google Scholar 

  • Orozco M. Migration and remittances in times of recession: effects on Latin American economies: Inter-American Dialogue; 2009.

  • Orozco M. Remittances to Latin America and the Caribbean in 2017: The inter-American dialogue; 2018. Retrieved from https://www.thedialogue.org/wp-content/uploads/2018/01/Remittances-2017-1.pdf

  • Passel JS, D'Vera Cohn G-BA, Gonzalez-Barrera A. Net migration from Mexico falls to zero--and perhaps less. Washington DC: Pew Hispanic Center; 2012.

    Google Scholar 

  • Pfutze T. Does migration promote democratization? Evidence from the Mexican transition. J Comp Econ. 2012;40:159–75.

    Article  Google Scholar 

  • Ratha D, Mohapatra S, Silwal A, editors. Migration and remittances factbook 2011. Washington, DC: World Bank; 2011.

    Google Scholar 

  • Rehm P. Risks and redistribution an individual-level analysis. Comp Polit Stud. 2009;42:855–81.

    Article  Google Scholar 

  • Rehm P. Social policy by popular demand. World Polit. 2011;63:271–99.

    Article  Google Scholar 

  • Roig M, Recaño-Valverde J. The impact of the global finanical crisis on migration to and remittance flows from Spain. In: Sirkeci I, Cohen J, Ratha D, editors. Migration and remittances during the global financial crisis and beyond; 2012. p. 255–70.

    Google Scholar 

  • Schneider A. State-building and tax regimes in Central America: Cambridge University Press; 2012.

  • Sirkeci I, Cohen J, Ratha D, editors. Migration and remittances during the global financial crisis and beyond. Washington, DC: World Bank; 2012.

    Google Scholar 

  • Stark O, Bloom DE. The new economics of labor migration. Am Econ Rev. 1985;75:173–8.

    Google Scholar 

  • Tertytchnaya K, De Vries CE, Solaz H, Doyle D. When the money stops: fluctuations in financial remittances and incumbent approval in Central Eastern Europe, the Caucasus and Central Asia. Am Polit Sci Rev. 2018;112:758–74.

    Article  Google Scholar 

  • Tyburski MD. The resource curse reversed? Remittances and corruption in Mexico. Int Stud Q. 2012;56:339–50.

    Article  Google Scholar 

  • UNSD Commodity Trade (COMTRADE) database. United Nations Subscription Division., https://comtrade.un.org/. 2017.

  • Yang D. Coping with disaster: the impact of hurricanes on international financial flows, 1970-2002. BE J Econ Anal Pol. 2008:8.

  • Yang D, Choi H. Are remittances insurance? Evidence from rainfall shocks in the Philippines. World Bank Econ Rev. 2007;21:219–48.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Political Science, University of Denver, Denver, CO, USA

    Jesse Acevedo

Authors
  1. Jesse Acevedo
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Jesse Acevedo.

Additional information

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

Fig. 6
figure 6

Distribution of responses: should the government implement strong policies to reduce income inequality?

Full size image
Table 8 Variable descriptions from LAPOP surveys
Full size table
Table 9 Summary statistics
Full size table
Table 10 Contextual variables
Full size table
Table 11 Employment, remittances, and redistribution
Full size table
Table 12 Income distance, remittances, and redistribution
Full size table
Table 13 Balance tests for matching model 1 (bare model) from Table 3
Full size table
Table 14 Balance tests for matching model (full) from Table 3
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Acevedo, J. Migrant Remittances and Demand for Redistribution. St Comp Int Dev 55, 403–435 (2020). https://doi.org/10.1007/s12116-020-09309-2

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12116-020-09309-2

Keywords

Search

Navigation