IntroductionIn 1942 the bilaterally approved Bracero Program invited citizens from Mexico the opportunity to supplement the diminished U.S. workforce. Over the next 22 years an estimated five million braceros (workers) entered the U.S. under legal contracts and an equal number of Mexican laborers came illegally to fill vacant jobs in the agriculture and railroad industries (del Pinal and Singer 1997; Martin and Midgley 2006). By most accounts this program unwittingly ushered in the beginning of large scale illegal immigration. Equally significant, however, is that since the program's inception a considerable remittance stream between the two countries has developed.With an estimated 20 million Mexican-born people living in the U.S. (both legally and illegally) (Migration Information Source 2005; Martin and Midgley 2006; The Economist 2007), the flow of remittance money to Mexico has increased dramatically over the past decade (Figure 1). Currently, remittances rank second behind Petroleum as the leading source of foreign currency in Mexico (The Economist 2005). In 2005, Mexicans sent just over US$20 billion home and a year later the amount slightly exceeded US$23 billion (Bank of Mexico 2007). This ranks Mexico as the second largest recipient of remittances in the world after India and ahead of China (World Bank 2006).Since the beginning of mass emigration from Mexico to the U.S., five states in Mexico's central highlands have traditionally sent a disproportionate number of migrants to the U.S.: Guanajuato, Jalisco, Michoacan, San Luis Potosi, and Zacatecas (Figure 2). Households in these five states have also received an overwhelming share of the total remittances sent to Mexico. In recent years, however, U.S. immigrants from Mexico have originated from all stretches of the country. Today, 18% of all adults in Mexico receive remittances (Suro 2003; Gonzalez Amador 2005) and the average amount sent home on a monthly basis has remained constant over the past decade at about US$335 (Figure 1) (Bank of Mexico 2007).The past five years have witnessed an increasing number of studies sponsored by such international organizations as the World Bank, Inter-American Development Bank, International Monetary Fund, and Multilateral Investment Fund seeking to better understand the economic impact that remittances are having on growth and development for various countries. Conclusions reached by these reports suggest that remittances: 1) are an important source of foreign currency, 2) provide five times more money to citizens in need of development assistance than international aid (Williams 2006), and 3) effectively alleviate extreme poverty (IADB 2006). Yet for all their benefits, remittances lead to surprisingly little economic development or long-term investment and growth (Fajnzylber and Lopez 2006).Significantly fewer studies have considered the affect of transnational migration and remittances at the household level. Most of this work that has reached print has taken one of two main approaches (McKenzie 2006). The most common has been to identify who receives the money and how it is used. With a large percentage of men working in the U.S. and absent from village life, these studies have found that most of the money is sent to women, especially wives and mothers (Suro 2003; Bank of Mexico 2005). Moreover, 85% of Remittances sent home to Mexico are used to meet basic household needs and everyday living expenses, including education and health care (Figure 3) (Suro 2003). Sadly, less than 10% of the money is used for land investment, construction costs, or business development (IADB 2004). The three principle reasons why so little money is invested in land or business development are: 1) little money is left over after bills and household expenses are paid, 2) rural households tend to lack skills needed for such economic development, and 3) Mexico's banking infrastructure has not adequately provided investment opportunities to the country's rural, lesser affluent households (Bank of Mexico 2005; Massey 2005). …
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Jul 23, 2024
Richard Manase Nkunda 
Open Access