Economic Status & Remittance Behavior

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This report analyzes the current financial position and remitting behaviors of migrants living in the United States in the context of the 2008-2009 economic crisis. The report is based on findings from a survey of 2,000 Latin American and Caribbean migrants residing in five major U.S. cities. The findings are also compared to earlier surveys from 2009 and 2010 that characterized the economic position of migrants from Latin America and the Caribbean during the 2008-2009 U.S. recession. The results reveal important nuances of migrants’ economic well-being and transnational engagement.

Remittances constitute a key form of migrant transnational engagement. In 2012, remittances to Latin America and the Caribbean reached over US$61 billion, representing a major source of  income for many families, communities, and countries in the region. Migrant remittances can serve an important role in reducing poverty and enabling development. Moreover, remittances  often supplement other sources of income, allowing recipients to make greater investments in their health, education, housing and/or businesses.

It is essential to note that remittances are the product of a great deal of hard work and sacrifice on the part of migrants. When migrants are economically vulnerable, so is their ability to remit.  The graph below shows how remittances to Latin America and the Caribbean dropped during  the 2008-2009 U.S. recession, when migrants faced greater difficulties in the labor market.

As the U.S. economy has shown signs of recovery, Latin American and Caribbean migrants have generally been able to regain employment. Dominicans, Haitians, and Jamaicans have shown slight increases in unemployment, however.

Employment alone does not provide a complete picture of Latin American and Caribbean migrants’ current economic situation. This survey considers a wide range of factors, including savings, debt levels, and risk mitigation strategies to provide a nuanced portrait of economic resilience and vulnerability among migrants.

The economic conditions of Latin American and Caribbean migrants have improved only modestly since 2009. Despite some signs of recovery, migrants remain in a vulnerable position in terms of their income, savings, and debt levels. In many cases, their vulnerability can also be understood as a product of their legal status.

Key findings of this report include:

• Latin American and Caribbean migrants have been able to modestly increase their earnings and savings since the 2008-2009 recession;
• Remittances have also recovered, with flows increasing 12% from 2009-2013 to the countries included in this analysis;
• Of the 2,000 migrants surveyed, 60% have bank accounts in the U.S.; bank account ownership is correlated with gender, education, and length of time in the United States;
• Over 67% of respondents save money in some way, but only 26% of those who save reported doing so formally with a savings account in the past 12 months;
• Debt is relatively low, with 46% of respondents reporting no debt at all, and an additional 33% owing less than US$2,000;
• Only 20% of respondents feel “confident” that they could obtain US$2,000 for an unexpected expense;
• Taking migrants’ debt ratios, risk levels, incomes, and savings into consideration, one in three migrants can be classified as economically vulnerable;
• Transnational family structures and the gender of the migrant may impact remittance sending practices and family finances;
• Most migrants prefer sending remittances through remittance agencies, but a growing number are interested in switching to other methods of remitting, such as online transfers.

In light of this research, migrants are in a slightly better economic position than they were in 2009, but remain vulnerable in a number of ways. To ensure the economic well-being of migrants – and the families back home who rely on their economic contributions – steps must be taken to enhance financial access and economic opportunities.