Mexicans In The U.S. Are Sending Home More Money Than Ever

Enlarge this image toggle caption Ryan Eskalis/NPR Ryan Eskalis/NPR

Migrants from Latin America and the Caribbean are sending more money to their families back home than ever before.

These annual "remittances" — as they're called by analysts — topped $69 billion in 2016, according to central bank data compiled in a new report by the Inter-American Dialogue, a Washington, D.C.-based think-tank. The money has been a lifeline for the national economies of many countries in the region since at least the 1990s, when Manuel Orozco, a political scientist who authored the report, first began tracking remittances. They climbed steadily since then, only to plummet when the Great Recession hit the U.S. economy in 2008. But they began to rise again in 2012. The 2016 tally is the highest amount on record and an increase of nearly 8 percent over 2015.

About 40 percent of the money goes to just one country — Mexico — practically all of it sent by migrants in the United States. The recent surge is all the more notable because migration from Mexico has slowed to a crawl — with the number of migrants in the U.S. increasing by just 1 percent between 2010 and 2016 to a total of 11.8 million. Also, says Orozco, the median amount that any given Mexican migrant sends hasn't changed — about $300 at a go, 14 times a year, most commonly through a money transfer company such as Western Union.

So what accounts for this surge in cash to Mexico? Orozco explains that a much larger share of Mexicans already in the United States are now wiring money back. In 2010 fewer than half of Mexican migrants sent money home. Today two-thirds do.

Orozco can't be sure why. Though he regularly does large-scale surveys of Mexican migrants, "I haven't asked that question," he notes.

A possible explanation, he says, is that many Mexican migrants who would have gone back to Mexico are now staying put in the United States. His survey research indicates that from 2011 to 2016, the median length of time a Mexican migrant has lived in the United States increased from seven years to 12. Some migrants are deterred by rising violence back in their hometowns, says Orozco.

Also, he says, for migrants who are in the United States illegally, stricter U.S. border enforcement under the Obama administration has raised the stakes of going home. Many now worry that if they leave the United States they'll never be able to get back in.

Whatever their reasons, Orozco posits that the fact that more Mexican migrants are remaining in the United States means many people who previously would have simply brought cash home in their pockets may now be sending it via money transfers.

The growing importance of remittances is particularly significant in light of proposals that President Trump has floated to confiscate or otherwise target this flow in order to pressure Mexico into paying for an expansion of the border wall. During the campaign, Trump discussed various versions of the idea — including some that could potentially impact remittances to all countries, not just those to Mexico. As much as such a move would affect Mexico — for which remittances account for just over 2 percent of GDP — the ramifications could actually be greatest for the region's poorest, most violence-prone countries. Remittances make up nearly 20 percent of GDP for Honduras and El Salvador, for instance. And in the case of Haiti they account for one-fourth.