For Mexico, remittances are an important source of income. Mexicans living in the United States sent a record $23.1 billion back home in 2006, putting remittances third after oil and maquiladora (assembly plant) exports as a foreign-exchange generator for Mexico.[4] A 2003 survey found international remittances account for 15 percent of per capita household income in rural Mexico.[5]
However, the long-term effects of massive immigration are detrimental to Mexicos development and economic viability. A 2005 study found residents in Mexico, where someone has migrated from, had lower levels of education, than in places where no one migrated. Because of illegal immigrants tenuous position in the U.S. labor market, they will get only unskilled jobs in the U.S, regardless of whether they spend an additional year in school. Therefore, rural migrants have little incentive to invest in education.[6]
One study found that 70% of all remittances to Mexico go to living expenses (i.e. mortgage, rent, food, and utilities), compared with only one percent going to business investment. Consumption is the least productive use of income when the goal is growth and development.[7] Only when new capital goods are purchased and implemented does productivity actually increase. Remittances are an expediency that encourages dependence on the United States and fails to address the address the long-term economic future of Mexico.
FAIR:
