Remittances and Labor Force Participation in Mexico: An Analysis Using Propensity Score Matching

SummaryAbout 2.5 million Mexicans migrated to the United States during 1997–2002, and 1.6 million of them sent remittances to their families. Did recipients change their labor force status in response to these remittances? This question has been examined before. Unlike the previous studies, we separate persistent from sporadic remittances, and we use propensity score matching to measure differences in behavior. We find limited evidence of labor force participation effects of persistent remittances, which is broadly consistent with remittances being an integral part of household’s income generation strategy.