In this study, which is focused on Latin America, we have looked at the profile of the households that receive remittances, and we find that the profile is very different across different regions and subregions.
Pablo Fajnzylber: In this study, which is focused on Latin America, we have looked at the profile of the households that receive remittances, and we find that the profile is very different across different regions and sub-regions. So, in the case of Mexico and Central America, poor households are more likely to send migrants and receive remittances probably because the cost of migrating from Mexico and Central America to the U.S. is much smaller than the cost of migrating from South America, for instance, to Europe or the U.S. So, in South American countries, we do find that a large fraction of the families that receive remittances are from the middle class, which is consistent with the description made by Navin.
The poor cannot afford that cost. How can they benefit from remittances? They could benefit from remittances indirectly if remittances raise economic growth. That is, as we know, poverty can be reduced either by increasing the size of the pie, that is, increasing the rate of economic growth, or by reducing inequality. So, if remittances contribute to economic growth, they could indirectly benefit the poor even in countries where the poor do not receive a lot of remittances because they cannot afford to migrate.
Date: 7 Nov 2006
Given in this interview: Development Impact of Remittances in Latin America
