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ABSTRACT
We explore at the municipality level how the climate of criminal violence has affected the flow of remittances to Mexico. Using a panel of municipalities in the years 2006 and 2010, we find that drug-related crimes and overall rates of homicides have reduced the percentage of families that receive remittances. This result is robust to controlling for net migration, political variables, and traditional socioeconomic explanations of remittance sending. It is also robust to potential threats to validity. We interpret this result as suggestive of self-interested concerns when sending money home amidst a climate of rampant violence. Nonetheless, mixed motivations to remit are evident in our analysis.
Acknowledgements
We would like to thank Christian Ambrosius and two anonymous reviewers for useful comments on this article.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1. These types of studies also control for other factors that obviously may affect the propensity to remit, such as the legal status of migrants or their length of residence.
2. To be sure, there is abundant literature looking at the role that remittances play in contexts of conflict, yet conflict is rarely studied as a determinant of remittance sending. The emphasis is instead on the countercyclical role of remittances to help smooth the income of those left behind as well as the uses that remittances are given in conflict situations; for instance, to sustain insurgent movements or to support reconstruction efforts. See Carling, Bivand, and Horst Citation2012, 284–285 for a discussion.
3. In contrast, using survey data of different migrant groups and qualitative research among Somali and Pakistani communities in Norway, Carling, Bivand, and Horst (Citation2012, 302) find that Somali migrants are ‘devoted remitters’, reacting to the ongoing climate of violence in an altruistic way, and increasing the amount of remittances that migrants send back home despite not being a particularly wealthy migrant group.
4. Alvarado and Massey (Citation2010) find a heterogeneous response to violence in Mexico, Costa Rica, Guatemala, and Nicaragua. Only in Nicaragua were high homicide rates associated with greater emigration rates to the United States during the 1980s and 1990s.
5. Also, scholars are starting to pay closer attention to the role of remittances in helping autocracies to survive (Ahmed Citation2012) and to how remittances may facilitate democratisation processes (Pfutze Citation2013; Escribà-Folch, Meseguer, and Wright Citation2015).
6. Felipe Calderón won by a razor-thin margin of 0.6%. The opposing leftist candidate, Andrés Manuel López Obrador (Partido de la Revolución Democrática, PRD), did not concede defeat and contested the election in the courts and on the streets.
7. Database on deaths resulting from alleged criminal rivalry, Mexican Presidency.
8. There is unpublished evidence on the reverse relationship, namely, how remittances affect crime (Brito, Corbacho, and Osorio Citation2014). In Mexico, remittances seem to lower the incidence of crime at the municipal and state levels, possibly because remittances improve educational outcomes, which in turn reduces criminality.
9. The choice of years was made to match data from different sources across the longest time period possible, primarily because census data is available for 2005 and 2010.
10. For the logarithmic function to be defined we need to deal with the zeros, for which the natural logarithm is undefined. The log transformation is applied to the actual rate per thousand inhabitants plus one. Note that in 2006 only 6% of the municipalities report not having households receiving remittances while in 2010 the figure goes down to 2%.
11. The extent of return migration is controversial and sensitive to the source and the period under scrutiny. See Rendall, Brownell, and Kups’s research note (Citation2011, 1050) for a discussion of methodologies and contradictory results regarding return migration.
12. ‘BBVA: Remittances Reduction: a factor in poverty rise.’ Available at 'Migration Observatory, July 27 2009. https://www.bbvaresearch.com/KETD/fbin/mult/090727_ObsMigraMexico_2_eng_tcm348-198646.pdf.
13. ‘Money Trickles North as Mexicans Help Relatives.’ Available at http://www.nytimes.com/2009/11/16/world/americas/16mexico.html.
14. Calculated by Consejo Nacional de Población (CONAPO) using census variables from INEGI.
15. In a log-log model, the estimated effect of a 10% increase in the crime variables is given by .
16. In other words, we can conclude that the instruments are uncorrelated with the error term and hence correctly excluded from the estimated equation.