Household Income and Remittances

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Abstract

Remittances are an important source of income for Mexican households. Their use is associated with the characteristics within the households that receive them. It is also important to discern the sociodemographic characteristics of households and household heads where remittances make up most or all of the family’s income. In such households, it may not be reasonable to expect a significant impact of remittances on poverty reduction or on the development of the communities of origin. We aimed to examine and compare the main sociodemographic characteristics of households associated with remittance reception by gender of the household head and to analyze the characteristics of those where remittances represent a high percentage of the total income. Using data from the 2020 National Survey of Household Income and Expenditure in Mexico, we estimated a logistic regression to identify which characteristics were associated with the reception of remittances and a Tobit model to estimate the factors related to the percentage of household income represented by remittances. We found that employment status, residential location, indigenous status, and socioeconomic strata were associated with remittance reception and the percentage of income represented by remittances. These characteristics refer to a population in a situation of social vulnerability and economic precariousness. Certain factors were distinct between male- and female-led households, such as age, education level, reception of government benefits, and the presence of children younger than 12 years old or people with disabilities in the household. These differences suggest varying household configurations and strategies based on the gender of the household head.