This paper assumes that migrants derive utility from their own consumption, their own leisure, and remittances to their family. It hypothesizes that the labor supply and remittances of Mexican migrants in the U.S. are jointly determined. Shits in real exchange rates affect the cost of sending a...

Remittances to Mexico have increased more than six times in the past two decades. The boom in remittances can be explained mainly by U.S. economic performance as an attraction for Mexican workers, which implies more migration flows but also better-paying jobs. The immigrant’s income...

Why would migrant workers in rich countries ever return to poorer countries of origin? In a model of migration and household investment, with borrowing constraints and minimum investment thresholds, return migration occurs for either target-earnings or life-cycle reasons. This paper exploits a...

Millions of households in developing countries receive financial support from family members working overseas. How do the economic prospects of overseas migrants affect origin-household investments - in particular, in child human capital and household enterprises? This paper examines Philippine...

We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981-2005, we find that the elasticity of domestic wages to real exchange rate is 0.1 after a year...

This paper investigates the residential integration of transnational regional economies, comparing them with the standard national setting studied in urban economics. For this purpose, we construct a theoretical model for residential location choices for a transnational economy with integrated...

This article analyzes the relationship between remittances, exchange rates and money demand in Mexico. We find that shocks to remittances have a positive impact on domestic money demand. The results also suggest the existence of a bi-directional relationship between remittances and the exchange...

Conventional exchange rate theory has proven unreliable in its attempts to explain the real exchange rate. In the March 2003 Reserve Bank Monetary Policy Statement two graphs appeared, one of total net migration and the other the nominal TWI exchange rate. Closer inspection revealed they were...

Building on an analytical model, we provide cross-country empirical evidence that net skilled emigration appreciates bilateral real exchange rates through the wage channel in source countries. Chains of causality in the presence of the Law of One Price run through the "spending effect" and the...