Study: Mexican migrants give more money to US than to kin back home

exican migrants are spending more money on taxes in the United States than on the remittances they send home to relatives, according to a new study by Mexico’s largest bank, BBVA Bancomer.

In a new report, the bank said Mexican migrants paid nearly $52.8 billion in taxes in 2008, “an amount far higher” than the $25.14 billion they sent home in the form of money transfers.

“Just as Mexican migration to the U.S. has had a positive impact on Mexican families, it also has (been positive) for the American economy” because emigrants have met much of the demand for labor, paid taxes and contributed to economic growth, the study said.

BBVA said that between 1994 and 2008 the U.S. gross domestic product grew – at constant 2005 prices – by $4.4 trillion, with Mexican immigrant labor accounting for 7 percent of that total.

The report also said that Mexican migrants’ annual contribution to U.S. growth “has been growing” and represented approximately 3.8 percent of GDP in 2008.

Separately, the total employed population in the United States climbed between 1994 and 2008 by 23.3 million people, with Mexicans accounting for 3.8 million of the total.

Therefore, “in this period, Mexican immigration served to cover around 17 percent of the demand for labor in the United States” and “to a certain extent (helped) keep economic growth in that country at a high level,” the report said.

The bank noted that the economic crisis in the United States has pushed the unemployment rate among Mexicans in that country to around 12.8 percent, a level “not seen since at least 1988.”

That has caused the percentage of Mexican migrants living in poverty to rise from 22.1 percent in September 2008 to 27.1 percent at present, the highest rate in a decade.

This situation will improve once there is a recovery in the U.S. construction, manufacturing and trade sectors, which “are beginning to show the first signs of stability” with lower declines in output and employment, BBVA said.

The bank estimates that remittances to Mexico will fall 13 percent this year after declining 3.6 percent in 2008 relative to the previous year, although it expects those money transfers to rise between 1-5 percent in 2010.

Money from relatives abroad represents close to 19 percent of total income for urban Mexican households and 27 percent for rural households, according to official figures.

Source: Latin American Herald Tribune