Determinants of Savings, Remittances, and Spending Patterns among U.S. Migrants in Four Mexican Communities

Abstract

In this paper we attempt to overcome several weaknesses of earlier field studies of the effect of international migration on sending communities. In general, these studies fail to employ representative samples of migrants, specify theoretical models of decision‐making, or control for a variety of individual and household characteristics likely to affect how migrants dispose of their earnings, including sample selectivity. Representative samples of Mexican migrants from four sending communities are used to estimate a theoretical model that controls for a variety of individual, family, and trip characteristics; other stages of the analysis also control for sample selectivity. The findings suggest that migrant decision‐making is strongly and consistently determined by social capital and community membership, with other variables playing ancillary roles in different decision processes. The propensities to save, remit, and invest productively generally rose as ties to the United States increased, and were generally higher in communities with well‐developed local economies.

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