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Migrant Remittances During a Global Shock: Evidence From the COVID-19 Pandemic in Mexico

Christian Ambrosius
Christian Ambrosius
, 
Raymundo M. Campos-Vázquez
Raymundo M. Campos-Vázquez
 and 
Gerardo Esquivel
Gerardo Esquivel
   | Nov 02, 2023
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Published Online: Nov 02, 2023
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Received: Nov 25, 2022
DOI: https://doi.org/10.2478/izajodm-2023-0002
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© 2023 Christian Ambrosius et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

Trends in key variables during the pandemic year 2020.Notes: Authors’ calculations. See Online Appendix 1 for a description of variables.
Trends in key variables during the pandemic year 2020.Notes: Authors’ calculations. See Online Appendix 1 for a description of variables.

Figure 2

Remittances and employment situations in the US and Mexico (2020-Q2).Notes: Authors’ calculations. Data on employment levels in Mexico (left) is based on data on formal employees from the Mexican Institute for Social Security (IMSS). Exposure to unemployment in the US is calculated from a weighted portfolio of migrants from each of the 31 Mexican states (not including Mexico City) across their destination in the US (right).
Remittances and employment situations in the US and Mexico (2020-Q2).Notes: Authors’ calculations. Data on employment levels in Mexico (left) is based on data on formal employees from the Mexican Institute for Social Security (IMSS). Exposure to unemployment in the US is calculated from a weighted portfolio of migrants from each of the 31 Mexican states (not including Mexico City) across their destination in the US (right).

Online Appendix 2:

Decrease in mobility relative to baseline (left axis) and decrease in electronic transactions relative to previous year (right axis) during 2020 (daily values, smoothed)See Online Appendix 1 for a description of variables.
Decrease in mobility relative to baseline (left axis) and decrease in electronic transactions relative to previous year (right axis) during 2020 (daily values, smoothed)See Online Appendix 1 for a description of variables.

Remittances and electronic payments. Non-instrumented OLS

Amount of electronic payments (log)
Level of remittances (log) 0.80*** [0.17] 0.69*** [0.14] 0.34*** [0.06] 0.28*** [0.06] 0.03** [0.01] 0.01 [0.02]
Decrease in workplace mobility 0.72 [0.55]
Decrease in out-of-home events 0.44*** [0.07] 0.29*** [0.04]
Level of aggregation state state municipal municipal municipal municipal
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
R2 0.89 0.91 0.47 0.57 0.66 0.70
F-stat 116 106 167 144 562 299
No. of observations 62 62 772 772 1544 1544

Data description

Variable Data Description Level Q1 Q2 Q3 Q4
Remittances Inflow of total amount of remittances, in millions of USD.a) state 284.24 [248.65] 298.88 [258.78] 321.47 [258.48] 320.73 [272.49]
municipal 15.48 [19.09] 16.26 [20.21] 17.68 [22.38] 17.49 [21.29]
MX employment levels Number of formally employed persons registered with the Mexican Institute for Social Security IMSS, as a share of the adult population.b) c) state 0.23 [0.10] 0.22 [0.10] 0.22 [0.10] 0.22 [0.10]
municipal 0.18 [0.16] 0.17 [0.15] 0.17 [0.15] 0.17 [0.15]
US unemployment exposure Average exposure of migrants from each Mexican administrative entity i during quarter q using the weighting formula ∑k=1KUnempli,q⋆Dk,i \sum\limits_{k = 1}^K {{Unempl_{i,q}}\,{}^\star{D_{k,i}}} , where D denotes the share of diaspora from i in destination states k, and Unempl is the unemployment rate in destination state k. Data on migration corridors between Mexican municipalities of origin and US states of residence obtained from consular documents that register Mexican municipality of birth and US state of residence of all applicants.d) e) state 0.04 [0.00] 0.13 [0.01] 0.09 [0.01] 0.07 [0.00]
municipal 0.04 [0.00] 0.13 [0.01] 0.09 [0.01] 0.07 [0.00]
Electronic payments Total amount of electronic payments made via debit or credit card, geo-located at its point of sale. In millions of current Mexican Pesos.f) state 8845.12 [7268.58] 6737.49 [5437.24] 9170.64 [7452.55] 9656.16 [7660.82]
municipal 675.79 [1541.01] 509.52 [1160.97] 651.06 [1480.99] 785.08 [1772.43]
Decrease in workplace mobility Percentage drop in mobility between residence and workplace using location history from Google accounts on people's mobile devices, with respect to a median value for baseline days in the five-week period from January 3 to February 6, 2020.g) state −0.04 [0.02] −0.36 [0.06] −0.26 [0.04] −0.20 [0.03]
Migrants’ exposure to decrease in workplace mobility Average exposure of migrants from each Mexican administrative entity i to the drop in workplace mobility in their US states of residence k, using the same weighting formula as for exposure to unemployment.g) d) state −0.13 [0.00] −0.36 [0.01] −0.32 [0.00] −0.27 [0.01]
municipal −0.13 [0.00] −0.36 [0.01] −0.32 [0.01] −0.27 [0.01]
Decrease in out-of-home events Drop in the number of out-of-home events of cell-phone users, relative to the baseline data (March 2). The indicator first calculates the daily median for out-of-home events of all cell phone users, and then calculates the median over quarterly periods. Data before March 1 is set to zero and the fourth quarter ends on November 30.h) municipal 0.00 [0.00] −0.21 [0.17] −0.28 [0.15] −0.32 [0.15]
Financial development Number of bank accounts (sight deposits or “depósitos a la vista”) relative to the adult population.i) state 7.5 [10.6] 6.9 [9.4] 7.0 [9.5] 7.1 [9.5]
municipal 11.9 [21.2] 10.7 [20.4] 10.7 [20.1] 10.6 [22.0]
Distance Weighted average of direct distance in km from state capitals in Mexico to the state capital in the US state where migrants reside using the haversine formula. For exposure to unemployment, the average (weighted) distances between origin and destination is calculated depending on the distribution of migrants across the US.c) d) state 2016.13 [526.60]
municipal 2183.45 [589.86]

Elasticity of remittances with respect to mobility drops. State-level regressions.

Level of remittances (log)
I II III IV V VI VII
Migrants exposure to decrease in workplace mobility 8.33*** [2.19] 8.11*** [2.10] 3.30** [1.58] 3.28* [1.63] 3.24 [2.35]
Decrease in workplace mobility 0.52* [026] 0.48* [0.27] 0.08 [0.24] 0.05 [0.26] 0.04 [0.28]
Level of aggregation state state state state state state State
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
Interaction between weighted distance to diaspora and time No No No No No No Yes
R2 0.35 0.26 0.40 0.50 0.49 0.50 0.52
No. of observations 62 62 62 124 124 124 124

Elasticity of remittances with respect to employment. State-level regressions

Level of remittances (log)
I II III IV V VI
US unemployment exposure (log) −1.02*** [0.20] −1.00*** [0.21] −0.50** [0.20] −0.55*** [0.21] −0.55*** [0.20] −0.60* [0.32]
MX employment (log) 0.19 [0.30] −1.13*** [0.26] −0.73 [0.60] −0.56 [0.59]
Level of aggregation state state state state state state
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
Interaction between weighted distance to diaspora and time No No No No No Yes
R2 0.43 0.44 0.51 0.55 0.56 0.58
No. of observations 62 62 124 124 120 120

Effect of remittances on the amount of electronic payments. Two-stage least squares

Amount of electronic payments (log)
I II III IV V VI
Amount of remittances (log) 1.2*** [0.3] 1.3*** [0.39] 0.73*** [0.24] 0.70*** [0.23] 0.5** [0.2] 0.55** [0.27]
Drop in workplace mobility (Google) 0.0038 [0.0078]
Drop in out-of-home events (GranData) 0.40*** [0.12] 0.32*** [0.067]
Financial development −0.017 [0.12] 0.28 [0.42] −0.29* [0.16]
Level of aggregation state state municipal municipal municipal municipal
Weighted by diaspora size no no no no no yes
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
Weak instrument F-stat 12 12 66 67 16 28
# Observations 62 62 772 772 1544 1544

Elasticity of remittances with respect to mobility drops. Municipality-level regressions.

Level of remittances (log)
I II III IV V VI
Migrants exposure to decrease in workplace mobility 7.93*** [1.16] 8.24*** [1.16] 2.76*** [0.87] 2.76*** [0.87] −0.47 [1.47]
Decrease in out-of-home events 0.09 [0.06] 0.12* [0.06] 0.20*** [0.07] 0.19** [0.07]
Level of aggregation municipal municipal municipal municipal municipal municipal
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
Interaction between weighted distance to diaspora and time No No No No No Yes
R2 0.18 0.09 0.20 0.23 0.24 0.27
No. of observations 772 772 772 1544 1544 1544

Effect of remittances on the amount of electronic payments. LIML estimation

Amount of electronic payments (log)
Amount of remittances (log) 1.16*** [0.21] 1.17*** [0.21] 0.73*** [0.17] 0.72*** [0.16] 0.50*** [0.17] 0.50*** [0.167]
Decrease in workplace mobility 0.48 [0.51]
Decrease in out-of-home events 0.40*** [0.08] 0.16** [0.06]
Level of aggregation state state municipal municipal municipal municipal
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
Weak instrument F-stat LIML CI 12 [0.75, 1.56] 14 [0.76, 1.58] 66 [0.39, 1.06] 67 [0.41, 1.04] 16 [0.17, 0.83] 16 [0.18, 0.83]
No. of observations 62 62 772 772 1544 1544

Elasticity of remittances with respect to employment. Municipal-level regressions

Level of remittances (log)
I II III IV V VI
US unemployment exposure (log) −0.98*** [0.17] −0.98*** [0.17] −0.58*** [0.14] −0.58*** [0.14] −0.58** [0.25] −0.52** [0.17]
MX employment (log) 0.08 [0.16] −0.02 [0.12] −0.02 [0.12] −0.10 [0.99]
Level of aggregation municipal municipal municipal municipal municipal municipal
Quarters covered Q1, Q2 Q1, Q2 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4 Q1, Q2, Q3, Q4
Interaction between weighted distance to diaspora and time No No No No Yes No
Weighted by diaspora size No No No No No Yes
R2 0.21 0.22 0.24 0.24 0.27 0.22
No. of observations 770 770 1540 1540 1540 1540
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