The Impact of the 1996 US Immigration Policy Reform (IIRIRA) on Mexican Migrants' Remittances

30 Pages Posted: 19 May 2012

See all articles by Matias Vaira-Lucero

Matias Vaira-Lucero

Macquarie University - Faculty of Business and Economics

Daehoon Nahm

Macquarie University - Department of Economics; Macquarie University, Macquarie Business School

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy; IZA Institute of Labor Economics

Abstract

This paper investigates the effect of the US Illegal Immigrant Reform and Immigrant Responsibility Act of 1996 (IIRIRA) on the remitting patterns of Mexican immigrants. Using data from the Mexican Migration Project (MMP128), we find that a significant effect on remittance flows from illegal migrants took place after the implementation of the IIRIRA. This is consistent with the hypothesis that illegal immigrants are risk-averse agents who transfer more money to their home country as a mechanism to insure themselves against higher degrees of uncertainty within their host countries. Furthermore, this finding confirms previous research that conditions and policies in the host country affect migrants' remitting behaviour, and migrants' motivations are not only altruistic but also self-interested. Given that migrants' remittances and their savings are important sources of capital formation in many sending countries and of savings in the countries that host them, a better understanding of the effect that migration policies have on remittance flows can lead to more informed policies that can transcend the home security aspects that often dominate discussions about illegal migration.

Keywords: remittances, legal status, uncertainty, policy reform, illegal migrants, Mexico, migration policy

JEL Classification: F22, F24, J61

Suggested Citation

Vaira-Lucero, Matias and Nahm, Daehoon and Tani, Massimiliano, The Impact of the 1996 US Immigration Policy Reform (IIRIRA) on Mexican Migrants' Remittances. IZA Discussion Paper No. 6546, Available at SSRN: https://ssrn.com/abstract=2062745

Matias Vaira-Lucero (Contact Author)

Macquarie University - Faculty of Business and Economics ( email )

NSW 2109
Australia
+61 (0)2 9850 6474 (Phone)

Daehoon Nahm

Macquarie University - Department of Economics ( email )

Sydney NSW 2109
Australia

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy ( email )

Sydney, NSW 2052
Australia
+612 6268 8512 (Phone)
+612 6248 8450 (Fax)

HOME PAGE: http://www.unsw.adfa.edu.au/sbus/staff_cvs/about_max_t.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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