Survival in Mexico:Survival in Mexico:Remittances and Social Assistance among Remittances and Social Assistance among

Children and Women Left-Behind*Children and Women Left-Behind*

ODI-UNICEF ConferenceNovember 10-11, London England

Jeronimo Cortinawww.jeronimocortina.com

*The views expressed here are those of their respective authors and do not necessarily represent the official views of the University of Houston or of the United Nations Children's Fund (UNICEF).

Logic of the talkLogic of the talk

The case of MexicoThe case of Mexico

Alternative strategiesAlternative strategies

1. Households adjust their consumption patterns

– Cut back on children’s education and non-emergency health related expenses

– Increase household’s labor supply

2. Turn to the state’s safety net, to smooth out some of their liquidity constraints

What are the implications?What are the implications?• Consumption

– Decrease human capital– Perpetuate poverty cycle

• Social assistance– Fiscally strained governments– Changes in tax policies

Research questionsResearch questions

1. Are remittance recipient households more or less likely to have received social assistance before the crisis started or one year after it began?

1. One year after the crisis, is the responsiveness of social assistance conditional on remittances?

Before and after…Before and after…

% of social assistance of total current income % households receiving remittances

• Data:– 2006 and 2008 national income

and expenditure surveys

• Outcome variable:– amount received in social

assistance at the household level over a three-month period

• Includes:– Oportunidades, Procampo and

Adulto Mayores for 2008

• Predictor:– amount of remittances received

in a particular household over a three-month period

• Controls:– household income, educational

attainment, access to health services, basic dwelling characteristics, access to basic public services, food security, and social cohesion, average household employment level, the number of women and children living in the household, female-headed households, degree of development

Are remittance-recipient households more or less likely to Are remittance-recipient households more or less likely to receive social assistance?receive social assistance?RemittanceNon-remittances Rural - 2006 Urban - 2008

Urban - 2008Urban - 2006

Is the responsiveness of social assistance conditional on Is the responsiveness of social assistance conditional on remittances (2008)?remittances (2008)?

(1) (2) (3)

Variable Low

Development

Medium

Development

High

Development

Remittance Income -0.312*** 0.127* 0.230

(0.116) (0.0772) (0.148)

# of Females 164.9*** 102.3 20.37

(35.33) (65.98) (90.39)

# of Children < 18 yrs.

174.6*** 147.2** 275.2**

(33.44) (59.58) (130.0)

Female-Headed HH 576.7** -572.2* -409.9

(247.9) (294.4) (299.0)

What do these findings mean in the context of What do these findings mean in the context of the present economic crisis? the present economic crisis?

1. One year after the economic crisis became apparent, remittance-recipient, female-headed households that include children under 18 years of age were more likely to receive social assistance from the government than in 2006, a year before the economic crisis began.

1. Controlling for the determinants of social assistance, rural remittance-recipient households in low development areas were significantly less likely to receive social assistance in comparison to non-remittance recipient households.

What are the implications for the Mexican What are the implications for the Mexican government and families left-behind?government and families left-behind?

• National government– Macroeconomic effects mediated through the balance of payments– Mexico will face an increase in its fiscal burden due to the growth in the

demand for social assistance by remittance-recipient households especially those headed by women with children.

• Left-behind– Increase the proportion of people living in poverty. – The effects of a financial crisis on remittances, moreover, will be more evident

among households that are extremely dependent on remittances and those that reside in non-traditional migrant regions

ChallengesChallenges

• Creative policies that take into account both sides of the equation: the determinants of the supply of and the demand for remittances

• Co-development strategies between countries of origin and destination in general and between Mexico and the United States in particular, to reduce social, economic, educational and health inequalities between them should be the basis for incorporating migration, its causes, and consequences into countries’ developmental strategies that aim to maximize migration’s developmental potentials.