Sociology Insights


The productive use of remittances from Michoacan immigrants. The case of Huandacareo, Michoacan, Mexico

Author(s): María de la Luz Martín Carbajal and Alicia Melgarejo Terrazas

The productive use of remittances sent to Huandacareo by individuals who migrate to the United States has not contributed significantly to the economic growth of that city. However, it has benefited economically the families that have created microenterprises in the locality and that have employed a good number of workers other than those families.
Study design: A count was made of the businesses located in the center of the city of Huandacareo, Michoacán, Mexico that used or use remittances for their establishment and operation. It was found that of 152 businesses only 4% use remittances and, therefore, life histories were taken as a research method.
Result: We find that return migrants are more likely to be self-employed than nonmigrants, and that both return savings and the frequency of job changes during migration increase the likelihood for return migrants to become self-employed. These findings suggest that (a) return migration can help revitalize rural economies and alleviate poverty in less developed areas in Michoacan, and (b) repatriated capital is a key, stimulating factor in promoting entrepreneurial activities.
Conclusion: In this study it was observed that the proportion of productive investment of remittances for the creation of micro and small businesses in Huandacareo is very small, although it seems that it has positively influenced the economic growth of the locality either directly or indirectly.

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