Migradollars and Development: A Reconsideration of the Mexican Case

Abstract

Economic arguments, quantitative data, and ethnographic case studies are presented to counter popular misconceptions about international labor migration and its economic consequences in Mexico. The prevailing view is that Mexico-U.S. migration discourages autonomous economic growth within Mexico, at both the local and national levels, and that it promotes economic dependency. However, results estimated from a multiplier model suggest that the inflow of migradollars stimulates economic activity, both directly and indirectly, and that it leads to significantly higher levels of employment, investment, and income within specific communities and the nation as a whole. The annual arrival of around $2 billion migradollars generates economic activity that accounts for 10 percent of Mexico's output and 3 percent of its Gross Domestic Product.