The Mexican Dream? The effect of return migrants on hometown development

•We model for the effects of return migrants on development outcomes and political participation in Guanajuato, Mexico.•We examine original panel data as a means of testing our expectations.•Return migrants have a positive effect on all measures of human development (education, health, and income).•Return migrants improve political participation.•Policy makers should design programs intended to facilitate return migrants as they settle back into Mexico.

Mexican migrants are returning to their homeland at record rates. Along with material goods, these former migrants may bring with them new ways of thinking about the world and envisioning the future. Still, relatively little is known about the degree to which former migrants affect the wellbeing of their local communities over time. This study evaluates the effect of return migrants on health, education, income, and political participation in Guanajuato, Mexico during the period 2000–2010. The findings imply that returnees may have positive effects within local economies, improving not only income, but also education, healthcare, electoral participation, and overall wellbeing. The results of this study have important implications for policy makers operating within emigration-prone regions of the world.