1. Understanding the Impact of Remittances on Mexico’s Economy and Safeguarding Their Future Impact
- Author:
- Ryan C. Berg, Rubi Bledsoe, and Michael Ferguson
- Publication Date:
- 01-2025
- Content Type:
- Policy Brief
- Institution:
- Center for Strategic and International Studies (CSIS)
- Abstract:
- Beyond providing supplemental income for Mexican households, remittances—funds sent by migrants to friends and families in their home country—provide a stable flow of developmental finance to the poorest subregions of the country, which have not historically benefited from international capital flows, such as development aid or foreign direct investment. Mexico, the world’s second-largest recipient of remittances, has seen a steady increase in the total volume of remittances received, primarily due to the strength of the U.S. labor market and concurrent wage growth among Mexican workers in the United States. Mechanisms to keep remittances secure are not impermeable to criminal organizations, which have been known to use small-increment deposits to launder gains from illicit economic activity, including drug trafficking. However, through increased U.S.-Mexico cooperation, both countries can strike the delicate balance between facilitating flows of remittances to promote development and financial inclusion and securing those funds from exploitation by illicit actors.
- Topic:
- Development, Economy, Trade, Economic Security, and Remittances
- Political Geography:
- North America and Mexico