Do Migrant Remittances Affect the Consumption and Saving Patterns of Mexican Households?

Isalia Nava-Bolaños, El Colegio de México
Roberto Ham-Chande, El Colegio de la Frontera Norte

Remittances from United States to Mexico are received by significant numbers of households and have grown rapidly. A critical issue in order to determine the impact of migration on the source country is how the remittances are used. Since consumption and saving are a dynamic phenomenon, it is important to analyze the behavior throughout time. This paper analyzes the patterns of household consumption and saving over the life cycle. We focus on the differences in behavior among remittance-receiving households and non-remittance receiving households. We construct pseudo-panels data from the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH) for the period 1994-2008 to examine the dynamic effects. Main empirical findings are that remittance receiving households tend to have lower incomes. We find that younger and older remittance-receiving households have the lowest saving rates.