The impact of remittances on food insecurity: Evidence from Mexico

Abstract

• Employing instrumental variable ordered probit regressions, we estimate the impact of remittances on food insecurity. • Controlling for endogeneity, our findings show that remittances reduce food insecurity in rural Mexico. • International remittances improve the food security more than internal remittances. • In rural Mexico, remittances operate as a fundamental coping strategy against food insecurity. Literature has provided evidence that remittances have an impact on (economic) development and quality of life in developing countries. However, little is known about how remittances from different origins are used in relation to food insecurity. Using data from the CONEVAL Rural Households Surveys (ENCHOR) of 2013 and 2015, we estimate ordered probit regressions with instrumental variables in order to assess the potentially distinct impacts of international and internal remittances on food insecurity of households in rural Mexico. Our findings show that both kinds of remittances have significant effects on food insecurity. International remittances appear to reduce food insecurity more than internal remittances, although not enough to make remittance-receiving households food secure. The findings suggest that remittances are an important coping strategy but are not sufficient to eradicate the precarious food insecurity of poor households in rural Mexico. Therefore, remittances should be considered as a complementary step to reduce food insecurity levels, but should not replace the government’s responsibility for solving this problem.