, division of research remittance behavior in a new region for mexican immigration: the case of...

, Division of Research

Remittance Behavior in a New Region for Mexican

Immigration: The Case of South Carolina

Dr. Doug WoodwardDirector, Division of Research

Professor of Economics

W. Jared DuPree, Doctoral Candidate,University of South Carolina

The integration of national economies

More open markets for international: Trade flows Investment flows Labor flows

Understanding Remesas, Migradollars, Remittances

International Financial Flows Trade

Exports and imports Other foreign exchange earned by tourist expenditures

International capital (investment) Portfolio

Bonds and stocks Foreign direct investment (FDI) has outpaced other financial flows

Investment by multinational corporations new plants and large foreign acquisitions

Immigration Legal and undocumented movement of people Leads to remittances (remesas) These are one-way transfers of income, like gifts, to the home

country of the immigrant worker

Are Remesas Stable or Going to Diminish Like Oil Revenue Over Time?

Overview of Presentation:

Review remittance trends in the U.S. and South Carolina

Explain the 2005 South Carolina survey Present estimates of remittance trends

based on the South Carolina study Discuss implications for Veracruz

$45 Billion in Migradollars to Latin America in 2006

51 Percent Increase Since 2004

(in millions)

$1,110

$1,221

$1,378

$1,736

$1,869

$2,583

$3,083

$3,714

$5,222 $13,191

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

Virginia

North Carolina

Arizona

Georgia

New Jersey

Illinois

Florida

New York

Texas

California

Total Money SentRemittances to Latin America from the U.S. : 2006

(in millions)

$370

$383

$386

$407

$504

$517

$579

$618

$646

$921

$0 $200 $400 $600 $800 $1,000

New Mexico

Oregon

Indiana

Tennessee

Washington

Pennsylvania

Massachusetts

Nevada

Colorado

Maryland

Total Money SentRemittances to Latin America from the U.S.: 2006

(in millions)

$215

$219

$226

$253

$258

$292

$301

$322

$335

$337

$0 $50 $100 $150 $200 $250 $300 $350 $400

Kansas

Alabama

Oklahoma

Arkansas

Utah

Minnesota

Connecticut

South Carolina

Wisconsin

Michigan


(in millions)

$105

$130

$138

$142

$154

$154

$161

$166

$208

$214

$0 $50 $100 $150 $200 $250

Delaware

Rhode Island

Iowa

Idaho

Nebraska

District of Columbia

Kentucky

Missouri

Louisiana

Ohio


(in millions)

$9

$15

$22

$23

$32

$33

$33

$34

$100

$0 $20 $40 $60 $80 $100 $120

Vermont

North Dakota

Maine

South Dakota

New Hampshire

Wyoming

Alaska

Hawaii

Mississippi


Estimates of Latino Remittancesby Inter-American Development Bank

Rank State Total

1 Maryland $2,897

2 North Carolina $2,864

3 Alabama $2,797

4 Georgia $2,743

5 Virginia $2,621

11 South Carolina $2,261

16 Tennessee $2,132

Source: Inter-American Development Bank ( 2004). Sending Money Home, The First State-by-State Analysis of US Remittances to Latin America.

Top 5 remittance sending states with South Carolina and other Southern states.

South Carolina and Immigration

South Carolina is a new receiving area

Immigrant labor growing rapidly

Little understood effects on the economy

U.S. Hispanic Population by Ethnic Subgroup

Cuban, 3.70% Central & South American, 14.30%

Puerto Rican, 8.60%

Mexican, 66.90%

Other Hispanic, 6.50%

Source: U.S. Bureau of the Census, March 2002.

South Carolina Hispanic Population by Ethnic Subgroup

Dominican, 1.90%Central & South American, 7.91%

Puerto Rican, 15.72%

Mexican, 63.16%

Other Hispanic, 10.01%

Cuban, 1.30%

Source: U.S. Bureau of the Census, 2003 American Community Survey.

, Division of Research

2005 South Carolina Mexican Immigration Survey

Sample: (N=381)

Location: Mexican Mobile Consulates

Questionnaire: 27 Questions

- Anonymity & Confidentiality - $10 gift card for participating

- Conducted in Spanish

Regions of Data Collection

25.0%

38.7% 36.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Midlands Upstate Lowcountry

Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

Average Annual Income*$20,910 $16,591

$22,736 $21,617

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Average

All Respondents Midlands Lowcountry Upstate*Annual income based on weekly wages over 50 weeks.Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

Industries Hiring Mexican Immigrantsin South Carolina

Landscaping, 6.70%Manufacturing,

5.40%

Construction, 34.00%

Restaurant, 9.70%

Trade, 12.70%

Other, 31.50%


Type of WorkAll (370) Midlands (93) Lowcountry (130) Upstate (147)

academic 3 2 1 0

administration 9 1 5 3

agriculture 10 7 0 3

construction 124 28 36 60

consulting 2 1 0 1

equestrian 3 3 0 0

fitness 2 1 1 0

food processing 4 3 1 0

general 22 1 1 20

housekeeping/home making 21 3 11 7

hospitality 5 1 3 1

janitorial 4 1 2 1

landscaping 24 3 13 8

laundry 2 2 0 0

manufacturing 18 6 0 12

nursery 1 1 0 0

poultry processing 13 10 1 2

restaurant 36 6 20 10

textiles 1 1 0 0

trade 62 12 35 15

Time Living in South Carolina

8.2%

30.3%34.0%

22.4%

3.7%

1.3%

0%

5%

10%

15%

20%

25%

30%

35%

< 6 months 6 months -2 years

3-5 years 6-10 years 11-15years

More than15 years


Respondents’ Future Plans

34.1%

32.3

%

32.4

%

37.0

%

61.6

%

65.6%

58.8

%

61.6

%

3.2%

2.2% 7.

4%

0.0% 0.8%

0.0% 1.5% 0.7%

0%

10%

20%

30%

40%

50%

60%

70%

Per

cent

age

Stay in S.C. Return to Mexico Don't Know Both


States of Mexico

60% of the respondents are from 7 Mexican states

Veracruz

Guerrero

Hidalgo

Guanajuato

Federal District

Oaxaca

Mexico


Respondents’ Home States*State of Origin % of respondents

Veracruz 12.0%Guerrero 10.4%Hidalgo 8.0%Oaxaca 7.7%Mexico 7.4%Federal District 7.0%Guanajuato 7.0%Morelos 5.7%San Luis Potosi 5.4%Chiapas 5.0%Jalisco 5.0%Michoacan 3.0%Puebla 2.0%Tamaulipas 2.0%Chihuahua 1.7%Nuevo Leon 1.7%Queretaro 1.3%Sinoloa 1.3%Tabasco 1.3%

*Only those Mexican states whose aggregate numbers represented more than 1 percent of the respondent population are listed. Source: Mexican Immigrant Survey, 2005, Moore School of Business, University of South Carolina.

Percentage of Respondents with Bank Accounts

Bank Account Holders, 33.7%

No Bank Account, 66.3%


Top Reasons Indicated For Having No Bank Account

Does not have proper documentation

58.9%

Not enough money to save 12.1%

Not interested 7.6%

Don’t need it 5.1%


Average Monthly Remittances

$283 $217$315 $297

$0

$50

$100

$150

$200

$250

$300

$350

Average

All Respondents Midlands Lowcountry Upstate


Annual Remesas: $3396 per Mexican Immigrant in South Carolina

Number of Times that Remittances Are Sent

32%

44%

8%

3% 2% 1%

11%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

more thanonce per

month

once amonth

every twoor threemonths

every fourto six

months

at leastonce a

year

less thanonce a

year

never


Theories of Changing Remittance Behavior

A number of studies point towards the impact of acculturation and assimilation on financial and social behaviors.

Assimilation is defined as becoming more like the majority culture.

Acculturation is defined as the process of making sense of one’s culture as one comes in contact with another culture.

Hypotheses Latino communities tend to go through acculturation

stages. 1st Generation: Stick to culture of origin 2nd Generation: Assimilate to majority culture 3rd Generation: May attempt to bring old and new together

Geographic region (current home) seems to have more impact on financial behavior than ethnicity. In other words, Latinos will tend to act more like the majority

population of the region in which they reside. May be one reason why the longer a Latino stays in South

Carolina, the less they send remittances to Mexico.

Hypotheses Continued… South Carolina immigrants seems to be in a stage 1 and

2 of acculturation because it is a new receiving area. Remittances likely decrease with time due to assimilation

behaviors. Geographic region will likely dictate that Latinos will

develop similar social and financial patterns of majority culture over time. As more Latinos enter into 3rd, 4th, and 5th generation

Latino families, more traditional patterns in lieu of majority customs likely to be seen in social and financial arenas.

Predicting Remittance Trends: Multiple Regression Analysis

Those immigrants with the following attributes tend to send more money annually: Length of time in the U.S. in years (p<.003) * Income in $1000s (p<.002) * Number of Children in South Carolina household (p<.001) * Gender dummy variable (Female=1; Male=0) (p<.031) *

Y = (-.163) Time + (.03) Income + (-1800.09) Children +(-1342.09) Gender + 3844.52 (constant)

R Square = .139 Adjusted R Square = .116

Important Finding: The longer one stays in SC, the less they send.

* Denotes statistical significance

Predicting Length of Stay in South Carolina: Multiple Regression Analysis

Those immigrants with the following attributes are likely to stay longer in South Carolina (p<.000): Skilled Labor Dummy Variable (p<.038) * Own a Home Dummy Variable (p<.007) * Trips to Mexico in Last Five Years (p<.077) Number of autos (p<.000) * Number of people in household (p<.028) *

Y = (1.495) Skilled Labor + (3.169) Own a Home + (.048) Trips to Mexico + (1.961) Number of Autos + (-.619) People in Household + 6.174 constant

R Square = .626 Adjusted R Square = .530

* Denotes statistical significance

Growing Latino Population in South Carolina

Latino Population Our current estimate:

197,868 34% annual growth rate

over last three years U.S. Census estimates

135,000 for 2006. Current growth rates

would increase Latino population to 350,000 by 2008.

0

50000

100000

150000

200000

250000

300000

350000

400000

2005 2006 2007 2008

*Calculated Using Methodology of Kasarda & Johnson, 2006.

Re-estimated Latino Remittances Inter-American Development Bank

$332 million from South Carolina to Latin America

Moore School (USC): New Estimates Based on 197,868 Latinos in 2006 for South

Carolina 66 percent of Latinos in the labor force $3396 annual Latino remittances $443 million for South Carolina $279 million Mexican remittances

Final Thoughts• Mexican immigration in South Carolina is

growing rapidly• Current trends will create significantly higher

remittance flows from South Carolina to Mexico in the near future.

• Remittance flows may fall off over the long run• More understanding of how remittances are used

in Mexico is needed.

?

How Recipient Households in Mexico Spend Remittances

Basic Necessities, 79%

Savings, 8%

Education, 7%

Small Investment, 1%

Home, 1%Other, 4%

Source: El Impacto de las Remesas Familiares en México y su Uso Producti vo, Centro de Estudios Sociales y de Opinión Pública, Cámara de Diputados, Estados Unidos Mexicanos, December 2004.

Respondents Future Plans

34.1%

32.3%

32.4%

37.0%

61.6%

65.6%

58.8%

61.6%

3.2%

2.2% 7.

4%

0.0% 0.8%

0.0% 1.5% 0.7%

0%

10%

20%

30%

40%

50%

60%

70%

Per

cent

age

Stay in S.C. Return to Mexico Don't Know Both


Future Collaboration One problem with remittance flow: Often

spent on consumer goods, raising local demand without any increase in local production (most of the goods purchased are produced outside the community).

Encourage use of remittances in activities that will build a stronger local economy over the long run in Veracruz.

A goal of a future joint project will be to

provide a better understanding of investment prospects.

Evaluating investment prospects represents a highly constructive role that University of South Carolina researchers could play, in concert with colleagues in Veracruz.

, division of research remittance behavior in a new region for mexican immigration: the case of...

Documents

south carolina source

immigration south carolina

case of south carolina

south carolina study

veracruz slide

spanish slide

north carolina

latin america