Remittance Outcomes and Migration

Remittance Outcomes and Migration: Theoretical Contests,

Real Opportunities Jeffrey H. Cohen

The most obvious and visible contribution of migrants to economies (~f origin is the money they send or bring home to family and friends.

- -Massey et al., 1998:222

T he importance of migrant remittances to national economies is well documented and there is little debate over the value of these flows (see Russell and

Teitelbaum, 1992). t Nevertheless, there remains a great deal of discussion over how best to approach and study migrant remittances, and how to judge the value of remittances to global capitalism, national budgets, and local economies. In this article, I review and critique remittance studies in the social sciences and argue that contemporary micro-level approaches that link geography, local history, and a household's lifecycle stage with transnational processes offer a vital alternative to the unidimensional approaches of the past.

Before I turn to remittance outcomes in particular, I first briefly examine migration, because remittances do not occur in a vacuum; rather, they are part of a decision-making process that begins with the choice to leave one's household, community, and often nation (Cohen, 1995). Critical is understanding how migration has changed over the last several decades and the role that transnational linkages, associations, and processes play in contemporary remittance practices, because the flows of people and resources between contemporary origin and destination communities is complex and creates new opportunities and problems for migrants.

I follow the discussion of migration and the definition of remittances with the analysis of remittance outcomes. For the sake of argument, I organize studies of remittance outcomes into two groups: macro-level approaches, which focus largely on

Jeffrey H. Cohen is co-chair of Latin Amcrican Studies and assistant professor of cultural anthropology at Pennsylvania State University. His research on transnational migration between Oaxaca, Mexico, and the United States focuses on tile social impacts of migration and investment of remittances in rural Oaxacan communities.

Studies in Comparative International Development, Spring 2005, gol. 40, No. 1, pp. 88-112.

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national outcomes (see Adams, 2003; Taylor et al., 1996b), and micro-level approaches, which are concerned with the local effects of remittance practices (see Massey et al., 1994; Taylor et al., 1996a). I further divide micro-level approaches into two groups: first, those that tend toward the critical and argue that remittances impacts are largely negative (Binford, 2003; Reichert, 1981 ), and second, those that focus on the productive outcomes of remittance practices and tend to a take a less moralistic tone (Durand et al., 1996; Jones, 1998b)2

Analyses that are critical of remittance practices describe migration outcomes as one part of an addictive process that binds migrant-sending households and communities to an abusive and exploitative cycle of dependency. Remittances (or more properly, the promise of wages and the resulting remittances) coax sojourners across borders to participate in a never-ending cycle--migration leading to remittances and demand for remittances leading to further migrations--undermining local traditional systems in origin communities (Rubenstein, 1992). The second perspective, one focused on the productive uses of remittances, argues that remittances can lead to growth (defined in social as well as economic terms) for origin nations and communities, and sending households (SchifL 1994).

Finally, I synthesize these perspectives and argue that remittance practices should not be defined using either a macro- or micro-level approach, nor should we argue that outcomes must fit either a dependency or a developmental framework. Instead, 1 suggest that there is room for the development of a "realist" perspective built around geographic information, historical background on origin communities and sending households (including material on household development), and socio-economic data that include information on transnational processes. Such an approach recognizes that remittances cannot resolve social inequalities, nor do remittances necessarily lead to growth, but at the same time acknowledges that migrants may have few alternatives to sojourns.

Migration and Remittances

The importance of migration to populations throughout the world is evident in the continued and increasing movement of people from south to north and east to west (Castles and Miller, 2003; Massey et al., 1998). Whether we study Mexicans mi- grating to the United States or Pakistanis moving to England, there is little doubt that migration matters; and while migration is a process with deep roots and many distinctive phases, contemporary migration--migration associated with post-industrial movements, globalization, and transnationalism brings with it specific opportunities and challenges.

There are many ways to characterize migration; however, to understand remittances, it is important to differentiate between voluntary and forced migration as well as the movements of refugees around the world. While voluntary movement can be motivated by economics and is typically tied to local and international vicis- situdes in economic growth, forced migration and the movement of refugees is tied to neither growth nor development (Cohen, 1995). For these reasons, I will focus on voluntary movement.

Voluntary migration has shifted over the last several decades, from the large- scale emigration of Europeans to the western hemisphere before WWI and the Great

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Depression to the truly global phenomenon experienced in the 1960s. This period of global growth, described as "post-industrial migration" by Castles and Miller (2003), was characterized by the steady increase and internationalization of the migration pool around the world, as well as the movement of those migrants to more diverse destinations. 3

Contemporary migration has entered what many describe as a transnational phase, as migrants and global capital transcend national borders (Foner, 2002; Hannerz, 1996; Kearney, 1996; Levitt, 2001; Mittelman, 2000). At its most fundamental, transnational migration describes chiefly the movement of people (but also of goods and services) across national boundaries (Basch, et al. 1994). 4 Transnational migrants (sometimes referred to as transmigrants) cross borders, even as they remain firmly grounded in sending communities. Kearney (1996:112) characterizes this process as one in which transnational migrants follow paths that are, in effect, free- ways where the local and the global converge. The migrant straddles these sites, moving within as well as between realms, and in the process creates a new iden- t i t y - o r at least the opportunity to establish a new identity. At times, these moves (and associated flows of goods, information, and the like) become so regular as to create a "transnational community" that effectively transcends geographic boundaries and comes to exist between and among various locations.

Transnational movement is perhaps most apparent (or more widely reported) among those migrants moving from Mexico, Central America, and the Caribbean to the United States (see Cohen, 2001; Conway, 2000; Hendricks, 1974; Kearney, 2000; Lopez and Seligson, 1991 ; Massey et al., 1994). Nevertheless, transnationalism also characterizes moves by Pacific Islanders to Asian nations and South America, and Middle Easterners to Europe (Abella, 2002; Anarfi, 1998; Colton 1993; Shankman, 1976), among others. In each of these examples, transnational ties build upon social and cultural bonds that exist between migrants and their families and compatriots in both communities of origin and destination.

Furthermore, while transnationalism and the importance of connections between origin and destination countries have precursors in the migration experiences of earlier groups (Foner, 2000), the nature of contemporary transnational sojourns has particular implications for remittance practices--or perhaps more to the point, remittance practices influence transnational possibilities. Levitt (2000: 461) argues that transnational ties over time and space are intensified by the ease of travel and communication; the dependence of sending nations on migrant remittances; the efforts of nation-states to create communities abroad that include permanent migrants as members; the marginalization of migrants by host societies (in economic and social terms); and the increasing tolerance that sometimes accompanies the arrival of new ethnic migrant populations. While longitudinal data are not always available concerning these outcomes, research on transnational connections tends to fortify and support the hypothesis that migration can lead to long-term remittance practices, rather than the traditional expectation that remittances will decline or decay as migration flows mature (Stark 1978). This process, whereby remittances continue over the long-term, is evident among Dominicans moving between the Eastern Seaboard of the United States and their island homeland (ltzigsohn 2004; Itzigsohn, et al. 1999; Ricourt 2002); Mexicans moving between traditional migrant-sending regions in the central states of the country to the United States (de

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la Garza and Szekely, 1997; Massey et al., 1994); and Micronesians destined for Guam and Hawaii (Grieco, 2003). In each case, even after long periods away from their communities of origin, and even with the birth of children in receiving nations, migrants often continue to remit in support of their community of origin and to maintain their families in that community. 5

Finally, before examining the outcomes of remittance practices, it is important to recognize that not all remittances are monetary. Monetary remittances are abso- lutely critical and central to most migrant flows, and are certainly important for understanding the economic impact of migration for nation-states: witness the fact that remittances represent more than half of the hard currency income for developing countries, including El Salvador (see Landolt et al., 1999). Nevertheless, migrants are not limited to monetary remittances, and they can and do send other kinds of resources. One well-documented area includes the growing trade in used clothing that has developed in Zambia and the Pacific and that includes, among others, independent immigrants and immigrant-based firms (Brown and Connell, 1994; Hansen, 2000).

We should not discount the importance of the goods that migrants send home, the knowledge that they bring, and the networks that they create. In other words, the concept of remittances as a wide array of resources that any migrant has to offer to his or her community of origin is critical. The return need not be large; rather, often the symbolic value of the return trumps its economic worth. Cliggett (2003) found just such a situation in Zambia, where rural-to-urban migrants often remit small gifts as a way to maintain kin ties. These goods have little economic value and do not enhance the status of the household; nevertheless, they represent the continued connection between migrants and their origin households or families. Additionally, although it is beyond the scope of this review, we cannot discount the importance of flows that transport goods and resources from sending communities to migrants in their destinations--particularly for transnational movers. The significance of these exchanges is reflected in the attention and resources that politicians in communities and countries of origin give to expatriate communities living in destination countries, s'

Remittances and the Nation-State: Macro- and Micro-Scale Analyses

Macro-Level Approaches

Macro-level approaches to remittance practices and migration tend to focus on what Castles and Miller (2003: 27) describe as the "political economy of the world market, interstate relationships, and the laws, structures and practices established ... to control migration settlement." Remittances, when they are discussed, are framed in terms of global flows (particularly in terms of the balance of trade between nations) and the national impacts of the funds that migrants return to their nations of origin. However, as Massey and colleagues (1998: 223) point out, much of the macro-level work focuses on the indirect effects of migration and pays little attention to the transfer of funds to countries and communities of origin. Furthermore, while we learn a great deal about the national effects of these funds (on balance-of-trade issues, for example), we do not necessarily understand the immediate direct outcomes


for migrant households. In other words, macro-level analyses emphasize how nations respond to the push-and-pull factors that draw surplus labor away from communities and nations of origin, and not upon how remittances are used or the role they can play in domestic savings rates and foreign exchange. In such a world, migration is not a way for locals to earn investment capital; it is instead a means through which the sending country (whether Mexico, Turkey, E1 Salvador, India, or Bangladesh) can cope with surplus labor. The costs of migration are low-to-nonex- istent for the governments of Third World sending countries, and as emigration increases, the average incomes of nonmigrant workers may even rise as local labor surpluses shrink (Massey et al.,: 228).

Mitigating the benefits of remittance outcomes in macro-level analyses is, first of all, the downward pressure that migrants place on wages in their destination countries. Taylor, Martin, and Fix (1997) note that while migrant farm workers earn substantially more by entering the farm labor market in the United States, their presence effectively increases rural poverty for United States citizens. Second, in both United States and European farm labor markets, the presence of undocumented workers left employers with few reasons to improve working conditions for legal workers (Castles and Miller, 2003 ).7

There is also concern for the loss of skilled workers who, "voting with their feet," opt to migrate and leave their nations of origin (see Cornelius et al., 2001). ~ The resulting "brain drain" deprives countries of origin of skilled and entrepreneurial individuals who are best able to build local and national economies (Adams, 2003; Rivera-Batiz, 1982; Stinner et al., 1982). Brain drain is a critical problem in Pacific Island nations, including Tonga, Samoa, and the Cook Islands. Each of these island nations has lost more than half of its "vocationally qualified population" to jobs overseas (Connell, 2003: 61), an especially serious issue when those lost are highly skilled doctors and nurses needed for local health care (Brown and Connell, 2004). Connell (2003: 61) notes that the loss of skilled workers likely worsens the welfare and bargaining positions of these states and their populations. It is difficult to replace lost skilled workers not only because of the costs of training and lack of demand, but also because it can be impossible to substitute or transfer skills from one specialty to another.

A different problem occurs as migrants (and particularly skilled migrants) return to sending nations and are unable to find work. Stahl (2003: 43) notes that in Paki- stan, Bangladesh, India, the Philippines, and Sri Lanka, returning migrants have significantly higher rates of unemployment. While Stahl cannot determine why unemployment rates among returning migrants are substantially higher than among nonmigrants, one factor may be that migrants return to sending nations with skills that no longer fit the needs of rural (and even some urban) sending regions. Finally, remittances also decline as the educational attainment of migrants increases, re- gardless of the length of stay.

Nevertheless, and even with these negatives, the positive national impacts of remittances cannot be discounted. Regarding Asian remittance patterns, Stahl and Arnold (l 986) note that while most remittances go to daily costs of living in sending households, the productive use of the estimated $8 billion in annual remittances is an important resource to consider when examining balance of trade and global as well as local economic investment outcomes. 9 Focusing specifically on India,

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Madhavan (1985) finds a similar pattern: private remittances held by Indian-owned banks significantly improved the country's balance of payments to international lending agencies. Furthermore, the regularity of remittance flows over time (and particularly when local and national economies may decline) often helps stabilize the economies in countries of origin, as was the case for Asian nations in 2000 and Mexico in 1994 following the devaluation of the peso. Thus, remittances become one plank upon which a nation's loans are secured (Ketkar and Ratha, 2001). Fur- ther emphasizing the importance of remittances, several countries now tax transfers as they arrive in countries of origin. Van Doorn (2004: 2) notes that Colombian residents are charged a 3% tax on money received from migrants overseas, while in Brazil, transferred funds are required by law to pass through the Banco de Brazil for tracking.

There is growing recognition that migration is not simply an alternative for surplus labor; rather, it is an effective avenue through which a nation secures foreign capital and its citizens are able to save for both investment and household maintenance. This is clear in lesser-developed countries around the globe, where remittances rank as one of the top three sources of hard currency and are typically as important to national economies as tourism, the production and export of raw mate- rials, and agricultural production. A recent International Organization for Migra- tion (IOM) study reported that Pakistanis remitted $1.4 billion in 1994, or 17% of their country's total revenue for exported goods and services. Indian migrants returned $5 billion (14% of revenues), while in Bangladesh, migrants returned $1.1 billion, or 34% of their nation's total revenue for exported goods and services (IOM, 2000: 123). Furthermore, these monies can make up a substantial portion of a country's GDR The IMF notes that remittances totaled nearly a quarter of Yemen's GDP for 1999, although the average for the top twenty remittance-receiving countries was 6.15% of GDP in 1999 (see IMF 2001, Balance of Payments Statistics).

The indirect effects of remittances, including the ways in which returned capital flows through a nation's markets and banks, fosters savings and eases foreign exchange, and further illustrates how remittances can change national economies. Adelman, Taylor, and Vogel (1988) developed the Social Accounting Matrix to capture more clearly the indirect effects of remittances. Focused on Mexico, the matrix organizes inputs by economic sector (e.g., agriculture, industry, and commerce) and by socio-economic group (including small farmers and urban capitalists), and estimates the effects for each sector and group given each additional dollar returned by a migrant. The authors found that every dollar returned to Mexico increased the nation's GNP by at least $2.69, although the exact amount depended on which sector received the remittance and which socio-economic group spent it.

Micro-Level Approaches

Macro-level approaches to migration outcomes and remittance practices focus on national patterns and outcomes, particularly in terms of foreign exchange and labor patterns, but such analyses do little to help us understand what remittances mean for communities of origin, migrant-sending households, and the migrants (and nonmigrants) they include as members. To understand the local effects of remittance practices and migration outcomes, we must look beyond the aggregate number of

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migrants a country might send and contextualize remittance use in terms of local socio-cultural and economic patterns (see discussions in Jones, 1998b; Keely and Tran, 1989). Two micro-level approaches have developed around the subject of communities or households and remittance practices. One argues that migration is rooted in dependent relationships and that remittances "addict" sending communities to global markets that forsake local traditional practices. A second argues that migration can have positive and real benefits for origin communities and migrant-sending households.

Remittances and dependency. Micro-level approaches that focus on the dependent nature of migration outcomes argue that remittances distort local socio-economic systems and literally addict migrants to continued movement, to the detriment and decline of traditional social and cultural practices (Reichert, 1981 ). I will concern myself here with three key areas that mark most dependency critiques: first, that the conspicuous consumption of remittances (the expenditure of remittances on consumer goods and luxury purchases) distorts local economies; second, that remittance use intensifies social conflict and local inequality; and third, that rural sending households find themselves trapped in an endless cycle of repeat moves to national and international destinations, resulting in the forsaking of local affairs and local labor opportunities.

Most studies of voluntary migration, whether national, international, or transnational, argue that economics--and specifically the promise of relatively high wages--motivates most decisions to move (for a discussion of Mexico, see Cornelius and Bustamante 1989). Migrants typically find that they can earn the equivalent of a day's wage in their nation of origin in an hour or less once settled into a job in their country of destination (Baker et al., 1997). Research shows that the majority of money returned to sending households is spent on consumer goods, "luxury" items, and home improvements rather than on investments. For example, working in Jalisco, Mexico, Gonzfilez and Escobar (1991) note that 93% of all remittances went to household expenses. In my research on rural communities in Oaxaca, Mexico, I found that approximately 92% of remittances went to daily and household expenses, with only about 8% of remittances going to business start-ups or investments (Cohen and Rodriguez, 2004).

Other patterns are found among migrants from throughout the world. For example, Hansen (2000) found that Zambians who migrated to the Congo to work in mines typically returned home with 90% of their income spent on trade goods and clothing. Hansen argues that the monetary returns are so small as to restrict migrants to purchasing goods and clothing, and while the clothing returned by migrants fostered a small tailor/seamstress industry, it did not promote statewide economic growth.

Madhavan (1985) and Helweg (1983) find much the same pattern in rural India; Adler (1980) in Algeria; and Castano (1988) in Colombia. In each case, a substantial portion of all remittances goes to daily costs of living, household maintenance, and the purchase of goods and services. Van Doom, citing ILO figures, points out that "only a small percentage of remittances is used for savings and 'productive investments,' i.e., for activities with multiplier effects towards income and employment creation" (2004: 4).

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A second concern for proponents of the dependency approach notes that social inequality and conflicts tend to increase as remittances are returned to origin communities and sending households. Inequalities arise between migrant and nonmigrant households as the latter lose economic status in comparison to the rising incomes of the migrant households around them (Massey et al., 1998: 268). Stark, Taylor, and Yitzhaki (1986) argue that these inequalities are founded upon the differences that separate early or pioneer migrants from nonmigrants. Because early movers face higher costs and risks as they migrate, they are more likely to come from relatively wealthier households. When these migrants remit, the resources they return widen further the income inequalities that are found in origin communities. How these inequalities shift over time is an issue I will address below.

Dependency theorists also argue that social tensions arise as migrants move away from agricultural livelihoods and as conspicuous consumption collides with socio- economic inequalities. Potts (2000) found such a pattern among Zimbabwe's peasant farmers, who are increasingly dependent upon migrant remittances for their survival. Unfortunately, Zimbabwe's peasant migrants face racial as well as socio- economic inequalities as they balance their traditional identities as rural agricultur- alists with new identities as marginal urban migrant workers. The real struggle arises as migrants are threatened with the loss of their agricultural lands and forced to choose between remaining rural (agricultural) or becoming urban workers.

Research in Mexico has given us some of the best examples of the role dependency plays in migration and remittance outcomes. Reichert (1981, 1982), Mines (1981), Wiest (1984), Guidi (1993), and Binford (2003) argue that the costs of migration tend to outweigh any benefits, and these researchers find that remittances lead to increasing social and economic differentiation, inflation, and local labor shortages. The cultural costs of these remittances are manifest in the decline of traditional ritual practices and the replacement of community-based events with family and life-cycle rituals (for example, the celebration of a private wedding re- placing the status-earning sponsorship of a community's Saint's Day festivities). There is also the tendency for rural Mexicans to adopt immigrant clothing, lan- guage, foods, and ou t look- -a process that Alarcdn (1992) describes as "Nortefiizacidn." While adopting such a life-style is not necessarily a negative, the assumption is made that the process leads to the decline or corruption of local patterns of interaction--and in particular, a decline in kin-based support networks (see discussion in Guidi, 1993).

Proponents of dependency theory argue that the seductive pull of wages and the rise of receiving-household incomes that remittances bring addicts rural Mexicans to migration and leads to what Reichert coined the "migrant syndrome" (1981). This syndrome traps rural migrants in a vicious cycle of repeat migrations, because there are few if any opportunities for work in communities of origin. The urge to live well, make luxury purchases, and educate children cannot be sustained locally; therefore, migration grows even more prevalent as tastes for expensive consumer goods mounts. Furthermore, Wiest (1984) adds, the goods that migrants and their households purchase move hard-earned remittances away from communities of origin and to urban centers. Ultimately, the system collapses as remittances cease to be returned and migrants lose their attachment to sending communities and countries-- what Stark (1978) calls "remittance decay."


A final area of interest moves the dependency discussion of migration outcomes and remittance practices away from how money is used and toward the gendered and health effects of such dependent relationships, j~ Working in Java, Rudkin (1993) notes that remittances, while critical to household support overall, tend to go to men rather than women, and in migrant households the health status of women suffers. A similar pattern is found among Bantu migrants in South African; here Sharp and Speigel (1990) note that women are marginalized in Bantustan migrant households because employment opportunities are restricted almost exclusively to m e n .

Jamaican women face a similar situation. Griffith (1985) finds that most Jamai- can peasant women are forced to cover shortfalls in incomes as their male partners travel to work offthe island. Women supplement their budgets as remittances come home but, as Griffith notes, it accomplishes little beyond meeting the costs of household maintenance.ll This pattern is also seen among Turkana women who are forced to cope with the loss of labor as men migrate (Schultz, 2000). In this case, Turkana women who have lost male household heads to migration leave their nomadic lifestyle to settle in urban centers. Once settled, Turkana women adapt nomadic lifeways to the challenges of urban living (which include political pressure to become seden- tary), establishing social networks with kin and friends and "diversifying" their economic activities to include wage labor where possible.

Remittances and development. A second group of researchers focuses on the developmental role remittances can play for origin communities (particularly rural origin communities) and a "desire to overcome market failures that constrain local production" (Massey et al., 1998: 263). In this sense, migration decisions and remittance-use patterns are part of a range of decisions that a household can make as part of a broad set of survival strategies (De Jong, 2000; De Jong et al., 2002). First, and perhaps most importantly, remittances bring much needed capital (in the form of money and goods) to sending households. These resources, fixed and liquid, are available at a moment's notice for immediate needs, emergencies, and plans for the future (Taylor et al., 1996a: 402). Second, remittances provide an important safety net for those households that exist beyond the scope of the state and lack local wage work. Third, there is the realization that remittances can and do support local investments that are largely ignored by state programs and the international movement of capital (Jones, 1998a). Finally, migration outcomes and remittances can serve to create options for origin households that allow members more flexibility in their social roles and use of community- and kin-based networks (Roberts and Morris, 2003).

Research from around the globe reveals that remittances typically serve to meet the needs of sending households, and migrant decisions are driven to a large degree by the assumption that such returns will far outpace any salaries available locally. In this fashion, the decision to migrate becomes a way to spread risk and move workers (skilled and unskilled) out of tight or non-existent local labor markets (Stark, 1980).

I noted above that often more than 90% of the remittances that migrants return to their sending households are used for immediate daily costs, home construction or household repairs, and educational expenses. Nevertheless, remittances can foster

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local economic growth that the state will not or cannot support. Working in Mexico, Durand et al. (1996) found that enough remittances will typically go to other kinds of investments to have a real and substantial effect on public works projects and the economic infrastructure of a community. These funds are used to capitalize indi- vidual businesses, and may go so far as to allow communities to finance public works projects (Gijdn-Cruz et al., 2000; Levitt, 1998). Many Mexican migrants once settled in their new destination communities will organize clubs and associations to support projects in their communities of origin (Lowell and de la Garza, 2002; Menjivar et al., 1998; Orozco, 2002). The importance of remittances to foster investment extends to rural migrants from Africa (Adams, 1991; Hansen, 2000), Asia (Helweg, 1983) and the Pacific (Grieco, 2003).

In Egypt, urban sending regions appear to benefit more directly from the remittance practices of migrants than do rural origin communities. McCormick and Wahba (2003) find that investment in non-farm enterprises and in local projects increases as the length of a migrant's sojourn increases and as immediate expenses and de- sires are met. Furthermore, because most Egyptian migrants return to their origin communities, remittances are spread between urban and rural sending regions. Nevertheless, the authors argue that remittances, when they are invested, tend to flow to urban centers and foster or encourage the movement of rural Egyptians to urban centers, where they typically find better support for their efforts. Unfortu- nately, this shift also tends to increase rural-urban inequalities and stress urban services (McCormick and Wahba, 2003).

Turkish migrants were considered critical to the future economic health of their nation and were celebrated by the state for their role in potential economic growth (Castles and Miller, 2003; Paine, 1974). While the growth the state hoped for did not materialize, migration was critical for the survival and health of rural and poor urban households. Furthermore, for Turkey's minority Kurdish population, continued migration not only supports rural sending communities and households but has also created a broad support network that assists migrants as they move in and around Western Europe and as they organize themselves politically (Sirkeci, 2003).

A final example of remittances supporting business investments comes from rural-to-urban migration in China. Ma (2002) found that rural-to-urban migrants who return to their communities of origin are often critical to economic growth and tend to act as entrepreneurs in their townships and villages. Migration has more than financial implications for these movers. Urban migration tends to enhance the skills of the migrants, and boosts their capacity to later mobilize the social capital that is rooted in their work and social networks.

Remittances can play an important social role for sending communities, and as examples from China, Egypt, Turkey, and Mexico illustrate, the key is not simply that money flows to sending communities, but that the funds remitted support community organization, social investments, and sometimes entrepreneurial activities (see discussion in Chen 2000). In this sense, remittances are more than the return a household needs to meet its daily expenses; in effect, remittances are building blocks for community. This is clear in many discussions of remittance use in Mexico and in Alarcdn's (2002) discussion of the role that hometown associations play in the organization of community-based projects.~2 Migrants often serve important roles in national politics and village government, relying in part on their remittances to


meet the demands of office (see Baub6ck 2003). Sfigas (2004) argues that the history of caudillism, authoritarianism, and abuse in the politics of the Dominican Republic will likely only change as U.S.-based, transnational migrants pressure for changes in their island home. In my work in Oaxaca, I found that there was virtually no difference between the efforts made by migrant and nonmigrant households in terms of community support and village-based service over time (Cohen, 2002; Cohen, 2004).

Migration and remittance outcomes can influence the gendered basis of economic and political activity in myriad ways (see Pessar and Mahler, 2003). Migration decision-making and remittance outcomes encourage the economic independence of women in both origin and destination communities and foster the participation of women in the local political life of their origin communities (Weyland, 2004). Nev- ertheless, migration decisions and remittance-use patterns can also create new stresses (Gutierrez, 2004; Hondagneu-Sotelo, 1992, 1994). These stresses arise not only around the relationships between men and women as they cope with the outcomes of migration and relocation (Hirsch, 2003), but also as women balance household resource management with (and often without) remittances, or even make the decision to migrate. Brettell (2003: 145), among others, notes that younger women who migrate as daughters are often expected to remit regularly and directly to their parents. Often this expectation comes with a requirement to serve sons and relatives who have migrated, and migrant daughters lack the freedoms that those male relatives and siblings enjoy. Additional decisions that burden women surround what to do with remittances when they are received: Are they saved for future expendi- tures and investments, or used to cover immediate needs? Finally, these new roles as breadwinners, household managers, and political actors sometimes force women to vie with men and other women for positions of authority and power (Meier, 2000), and may lead to the development of class-consciousness among migrant women (Brettell, 2003).

The situation is also complicated by health concerns for women and children who are left in sending communities and must cover expenses as they wait for remittances to arrive, or who must save remittances for future expenses (see Kanaiaupuni and Donato, 1999). Most researchers argue that rural communities that experience a rapid increase in outward migration typically also experience increases in infant mortality rates and a decrease in the overall well-being of citizens, particularly women (see the discussion in the dependency section, above). These changes occur because origin households lose able-bodied workers and typically survive with less income as they wait for remittances to flow home. Also, women are often thrust into unfamiliar positions of authority and power that are demanding and stressful, potentially adding to a decline in overall well-being. However, Kanaiaupuni and Donato (1999) demonstrate that the health impacts of migration shift over the course and development of migration. The negative impacts of migration tend to decline as migration flows mature and the costs of border crossing decline. Furthermore, as migration matures, remittances increase, and negative health impacts decline in response. Finally, as migration matures, most infants show marked improvements in health.

Women can gain increasing financial independence as migration grows more common over time and as remittances become more regular. Working in Zimba-

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bwe, Schfifer (2000) notes that women, in response to the migration of men, often gain control of household resources and create cooperatives to better meet the needs of their households over time. Finally, Weyland (2004) argues that Dominican women who migrate to the U.S. and return to the Dominican Republic are challenging traditional roles and gaining acceptance as entrepreneurs and business leaders. Nevertheless, Weyland also notes that the majority of women continue to suffer, and her findings suggest that women's work is "characterized by poor working conditions, such as long hours of strenuous work in front of a machine, with hardly any benefits" (2004: 155).

Rethinking Dependency, Development, and Remittance Practices

Thus far, I have summarized macro- and micro-level approaches to remittance practices and migration and contrasted dependency and developmental frameworks. In this section, I argue that each approach has value and relevance. Macro-level approaches tell us how remittances impact national concerns such as labor-force com- position, balance of trade, and gross national product. On the other hand, such a perspective does not readily translate to the local. To understand outcomes in sending communities and for sending households, we must use micro-level dependency and developmental frameworks. The goal, again, is not to claim that one approach is always right; rather, dependency and development approaches have important strengths and weaknesses, and each offers the researcher tools for analyzing remittance outcomes. A dependency framework reminds us that local economies are often distorted by the arrival of global capitalism and that the outcome can be the immiseration of local populations and the loss of able-bodied workers (Adams, 1996; Binford, 2003). Nevertheless, arguments concerning the negatives of migration and remittance practices sometimes miss the economic growth and social maintenance that such processes can bring to rural communities, and thus a developmental approach is sometimes more useful (Taylor et al., 1996a).

To build upon the limits of a macro- or micro-level analysis of remittance practices, it is important to consider three factors that influence remittance outcomes for migrant households: geography; regional and local history, including the life- cycle of the household; and the social and economic connections that transnational migration patterns encourage and that appear to limit the decline of remittance practices over time.

Geographv

While regional boundaries and state borders do not always limit contemporary migration patterns, geography continues to influence outcomes fostering dependency or development in communities of origin. National borders remain obstacles for many migrants, particularly since the terrorist attacks of September 11,2001, and the global recession that followed. First, fears of additional attacks led to tighter border controls and sometimes mass deportations; second, the global recession meant that fewer jobs were available to migrants (Castles and Miller, 2003:178). Xeno- phobia also contributed to increasing tensions around international migration-- witness the tightening of the border and the appearance of vigilante-like groups in


Arizona to confront immigrants from Mexico, and the widespread fear of Muslim men in North America and Western Europe (Castles and Miller, 2003: 264). 13 The effects of these tensions appear to be short-lived. While xenophobia still motivates violence (on the U.S.-Mexico border, for example; Heyman, 1998), migration continues, driven by the demand for cheap labor in the West, the national demand for capital to support the economies of developing nations, and the desire among migrants to find higher-paying wage work.

More importantly, a community's geographic location has a bearing on the impact and use of remittances. Durand and Massey (1992) argue that a rural community's location near an urban center and the health of the community's agricultural institutions will encourage local investment and successful development. In fact, this appears to be true among Mexican migrants from the state of Oaxaca. Communities with relatively better access to the state's capitol show a higher rate of remittance investment than more isolated and rural communities (Cohen and Rodriguez, 2005). Similarly, strong networks linking migrants across regions and to sending communities encourage both remittances and investment at home. Work- ing in the Pacific, Brown and Connell (1994) note the important role that migrant networks play as migrants ship and sell used clothing (and other goods) within their origin communities. Levitt (2000) finds similar patterns among Indians from Gujarat, Brazilians, and Dominicans as they move and settle in the United States. In each case, these connections link social actors and economic outcomes in complex ways, creating new opportunities for success (see Levitt, 2001).

Global Information System (GIS) technology provides one way to model and plot geography's impact on migration outcomes and remittance rates (see Conway, 2004). Alternatively, we can understand geography's impact by testing various independent variables (including local economic activity) against remittance rates and migration outcomes (Durand and Massey, 1992). Such tests can clearly define how space and geography influence and relate to economic dependency and the opportunities for economic development.

History

Time and scale are also significant variables in defining remittance use and the impacts of remittances on social inequalities (Jones, 1998b). Time influences outcomes both in terms of migration's overall history in a region and in terms of the life-cycle of the migrant household (which can be thought of as local history). A region's history defines migration outcomes and remittance practices. Is migration in its early stages and costly as well as risky, or has migration entered a period in which it is self-sustaining? Massey (1990) describes the process whereby migration develops from (a) a decision made by target movers with resources to support their sojourns to (b) an opportunity open to a diverse population. In other words, every additional migration made (whether we are focused on a household, community, region, or nation) reduces the risks for the next migrant. As risks and costs decline and as more migrants enter the pool of workers living abroad, remittances should increase, at least in the short term. In fact, researchers have tested this process in various countries and found that, although the costs of migration are initially high and households may face losses early on, as remittances are returned, a household's

Cohen 101

overall productivity typically increases (see Adams, 1991; Conway and Glesne, 1986; Jones, 1998b; Lopez and Seligson, 1991; Lowell and de la Garza, 2002; Tay- lor, 1992).

A recent paper by Taylor, Rozelle, and Brauw (2003) clearly shows how this process plays out among Chinese rural-to-urban migrants. The authors found that migration has a short-term negative economic impact on these movers, particularly for those rural entrepreneurs who trade self-employment in origin communities for wage work in urban destinations. However, the authors note that over the long term, migration tends to have a positive impact on the economic status of farming households even as production of grain drops. The problem is not so much one of migration; rather, the authors argue that the Chinese government must decide how to address falling grain production, even as rural livelihoods improve.

Like regions, households follow trajectories in their development (Wilk, 1989, 1991 ). Households plan for the future around the strengths of their members (educational, economic, and social), the needs of those members for goods and services, and the demands of the larger community (Blank and Torrecilha, 1998; Cohen, 2001; Grieco, 2003; Palloni et al., 2001; Trager, 1984). I have noted that most remittances are returned to households to cover immediate expenses; however, remittances are sometimes shifted to investments as migrants gain experience, and as their households grow and the children of those households mature and either move on to form new households or join the work force (see also Massey et al., 1998: 273). Working with Bangladeshi data, van Doorn (2004) finds that 4.8% of remittances go to business start-ups, 3.1% are earmarked for savings, 3.5% for loan payments, and 2.8% for education. I found a slightly larger percentage of remittances earmarked for business or agricultural investment in rural Oaxaca (approximately 8%), while 6% of remittances were spent on children's education (see Table 2 in Cohen and Rodriguez, 2004).

Portions of remittances also go to the support of a community's needs, sometimes in the form of funds that a migrant association returns to a community of origin for a particular improvement (Goldring, 1999; Itzigsohn et al., 1999; Smith, 1998). In these cases, there is little anxiety that migration will lead to the collapse of rural communities. Working in Suriname, Gowricharn (2004) argues that remittances enable migrants to express their commitments to origin communities and families. Thus, remittances serve both economic and moral (or cultural) purposes. Remittances enhance the overall status of a household in terms of its ability to purchase goods and services, and they allow migrants to create strong "primordial" bonds that, while difficult to enumerate, are critical to household success.

Grieco (2003), working with Micronesians who had migrated to Hawaii and Guam, found that the anticipated decline or "decay" of remittances over time has not occurred. Rather, the kin ties and histories of migrant-sending households tied migrants to their Micronesian communities and fostered the continuation of remittance practices. Do these changes encourage the growth of inequalities in communities? The question is important but is as yet largely unanswered. Massey et al. (1998) summarize several early-1990s studies that suggest an initial increase in equality during the early phases of migration, in other words, as pioneer migrants (typically from wealthier families and thus with more resources to begin with) succeed in their sojourns, inequalities show some signs of increasing (see Stark, Taylor, Yitzhaki,


1986). Nevertheless, as migration matures and the costs and risks of movement decline, inequalities should decline (Massey, Goldring, Durand, 1994). A second question asks if inequalities increase between migrant and nonmigrant households. Unfortunately, the data are simply not available for a detailed discussion; however, it does appear that nonmigrants sometimes perceive themselves as impoverished in settings where their "immobile" lifestyle contrasts with the lives of returning migrants and households supported by remittances (Taylor and Wyatt, 1996). In con- trast, Malmberg (1997) argues that nonmigrants often find alternatives to migration (including local-circuit moves) that mitigate the need to travel. This is particularly true where opportunities tied to tourism, state development, and local markets are available (Cohen, 2002). Understanding history's role in migration outcomes and remittance practices further allows us to critique dependent and developmental outcomes in both origin and destination communities.

Transnationalism: Societal and Economic Connections

A final factor that will influence the dependent and developmental nature of remittance practices and migration outcomes among contemporary movers is transnationalism} 4 Transnational migration refers to circular migration during which the migrant remains engaged with his or her community of origin. Transnational networks are the linkages between individuals across space, and most often across national borders. Those networks rooted in the initiatives of the immigrants themselves are said to be "from below," while those keyed to institutional actors come "from above" (see Portes et al., 1999).

Transnational ties between migrants and their sending households can reinforce remittance practices. Grieco's (,2003) work with Micronesians is a case in point. Grieco found that the strength of the linkages and relationships that exist between migrants and their sending households had a positive effect on remittance practices over time. The same pattern is found among Mexican migrants living in the U.S., who typically support projects in communities of origin (de la Garza and Orozco, 2002; Hulshof, 1991). Is A similar pattern is present in Taiwan, where migrants carefully maintain relationships with sending households to ensure future well-being once they have completed their sojourns (Roberts and Morris, 2003). What is interesting is that often migrants do not return to their communities of origin; nevertheless, the strength of ties and networks, the stories of future return, and the remittances sent to nonmigrant family members serve to support and foster the well-being of the migrant in his or her destination (Levitt, 2002).

The effects of remittances reach beyond the economic to enhance the health status of migrant children, as well, over the long term (Kanaiaupuni and Donato, 1999). Additionally, while migration often places new stresses upon women in sending households, it also encourage these women to take on new roles in community government and household management (Curran and Rivero-Fuentes, 2003; Rees and Coronel Ortiz, 2002). Finally, such linkages also promote political activism, as national leaders seek support from expatriates--and, in some cases, the votes of those expatriates, as recent elections in the Dominican Republic illustrate--and perhaps more importantly, as local migrant communities gain the strength to push

Cohen 103

for political reforms in sending nations, as the Kurds have done in Turkey (Sirkeci, 2OOO).

Conclusion

The importance of migration is clear, and the role that remittances play for rural sending communities throughout the world will likely continue to grow. What I have endeavored to show is that it is not always easy to evaluate the meaning and impact of those remittances. The future of remittance practices poses serious ques- tions for researchers. Will "brain drain" be a serious concern in the future, as sending countries continue to neglect local development and citizens are forced to "vote with their feet" and seek wage work that is unavailable locally? What of the contrasts between approaches that emphasize the dependency or development that ac- company remittance practices? Finally, we must ask whether the strength of transnational ties will continue to foster remittance flows to sending communities, or whether these ties will fade as second- and third-generation migrants enter the social worlds of their predecessors. There are some indications that linkages can transcend the generations and that transnational ties will continue to foster growth in communities of origin even as migrants integrate into their new homes (Greico, 2003; Landolt et al., 1999; Levitt, 2003; Morawska, 2003; Portes et al., 2002; Torres- Salliant, 2000), but we are still far from a definitive answer.

What we do know is that migrant households around the world depend upon remittances to secure a livelihood. Typically, remittances serve to cover the costs of daily life that cannot be met through local activities, and can therefore lead to dependency and foster the growth of a "migration syndrome" a situation in which sojourns are made for the sojourner's sake and the outcomes have little impact on the daily life and economic well-being of the sending community. On the other hand, research from around the globe shows that remittances also become critical to growth and development. This significance is particularly evident in countries that celebrate their migrants (such as Turkey) and in nation-states that develop policies to either tax remittances (Colombia) or funnel them through federal institutions to better track capital (Brazil).

I have tried to show that remittance practices cannot be viewed through a lens that emphasizes only dependency or only development. Rather, by understanding the history of migration, the stages of migrant household development, and the geography and social milieux (including the social linkages) that characterize migrant households, we can begin to qualify what is dependent in a given situation, and how that situation may lead to development and growth over time. Such a position flies in the face of the assumption that dependency is inevitable. Working in Mexico, Kearney (1986), Reichert (1981 ), and Rubenstein (1992) argued that increasing migration rates would lead to increased levels of dependency in three ways. First, they argued, migrant communities would move away from their base in sub- sistence agriculture. Second, the increased demand for consumer goods that could not be produced locally would mean that the remittances used to pay for those goods would flow away from rural communities and any local growth they might support. Finally, the desire for foreign goods and life-styles would generate future


migrations, as such things can only be accessed if individuals are willing to leave communities, cross borders, and enter the wage-labor market.

While these arguments are strong, they do not reflect historical trends, the important role remittances play beyond the purchase of luxury goods, or the value of transnational linkages to the maintenance of the household and community. For example, my own findings in Oaxaca suggest that migration does not necessarily come at a cost to agricultural production; throughout rural Mexico, the production of maize and other produce continues to be important to most migrant and nonmigrant households (Cohen, 2004). 16

It is obvious that migrants and nonmigrants alike are demanding the services and goods that they associate with modern life. These goods and services cost money, and most of the money that is used to make such purchases and improvements is siphoned away from rural communities to urban centers. Yet the services (e.g., po- table water and sewerage) and many of the goods that are in demand actually enhance public health and improve the quality of life for rural residents (see Conway, 2000). Furthermore, over time, remittance use tends to shift from purchases toward investment. Finally, it is critical to remember that migrants remit more than money. They bring goods, services, knowledge, and possibilities that nonmigrants sometimes cannot imagine. These flows are sometimes more important than cash, whether they are clothes that can be resold in central African nations (Hansen, 2000) or such abstract ideas as "democracy" that frame new political movements in places like the Dominican Republic (Torres-Saillant and Hern~ndez, 1998). Such goods and ideas can be as crucial to future development as any amount of money.

What is clear is that we should not mistake the success of migrants around the world as a sign that everything is fine; rather, we need to remember--and clearly report on-- the dismal context that many rural migrant households find themselves in today. The constraints that limit decision-making and local opportunities are huge and cannot be discounted, and our analyses need to clearly state the limits that migrants face and the creative ways in which they respond to those limits.

In Worlds in Motion, an exceptional analysis of migration around the globe, Massey et al. conclude that "the greatest challenge is to design studies that are more closely connected to theory. In reviewing empirical literature from around the world, the most striking feature is the degree to which current research is unconnected not just to a particular theory, but to any theory at all" (1998: 293). The point is well made: the goal should be to explain and compare migration outcomes and remittance practices across the globe, and our theories must be "connected" and rigorous. As I have shown, unidimensional theories of remittance practices, with a strict focus on either dependency or development, often make the very mistakes against which Massey and colleagues warn. To make matters worse, remittance studies too often eschew any theoretical framework, focusing instead on specific ethnographic examples, to the exclusion of global understanding. By exploring remittance practices as part of a household's strategic planning--an approach that takes into account geography, history, and transnational networks we begin to move beyond the limits of dependency and developmental frameworks. The signs of change are encouraging, and the growth of new multidimensional approaches is an indication that we are meeting the challenge head-on.

Cohen 105

N o t e s

1. A 2004 report by the World Bank estimates that nearly 175 million migrants from developing nations remitted at least $90 billion to sending households in that year. The report goes on to note that these remittances are the second-largest source of capital for poor countries and their populations (World Bank, 2004).

2. My approach is not without precursors. Keely and Tran (1989) used a similar framework lo evaluate remittance practices in their analysis nearly 25 years ago.

3. For reviews of migration theories, see Massey et al., Worlds' in Motion (1998), among other works.

4. While international and transnationat movers are typically the focus of much of the work on remittances, the remittances of internal, rural-to-urban movers should not be discounted (Remple and Lobdell, 1978). For many migrants, internal sojourns that follow seasonal rounds serve as a foundation for long-term, cross-border moves (Hirabayashi, 1993). Furthermore, in many places where the costs of international migration are prohibitive, rural-to-urban migrations may become important. This is particularly true for many Sub-$aharan African nations (Cliggett, 2000; Potts, 2000; Sporton eta].> 1999).

5. The growing awareness of remittance practices that continue over time (and, in the case of Do- minicans, extends to the children of migrants; Itzigsohn, 2004) contrasts with expectations of "'remittance decay,'" or the expected decline in remitting that should increase with length of stay (see Stark, 1978).

6. Guarnizo makes this point clearly (2003: 680): "Migrants' transnational living generates demands for goods and services that in turn generate a complex array of backward and forward economic linkages that are captured by nonmigrant actors .... As a result, migrants' resources flow not only north-south [in the case of Latin America remittances flowing from the U.S.] bul also south-north, as well as north-north."

7. The use of undocumented farm labor has led to violence in both France (in the late 1970s) and Spain (in 2001). The pattern of migrant abuse (including the many deaths of Mexicans on or near the U.S. border) led the AFL-CIO to alter its stance against the use of foreign/undocumented labor in the U.S., and to recognize that migrant workers must be respected. Nevertheless, the lack of support for unionization, and the lear of organizing that tends to pervade most migrant communities, means the situation has not changed (Castles and Miller, 2003: 182; Kearney, 1996).

8. Discussions of the migration of skilled labor also tend to locus on national trends, and there are few reports on the impact that the loss of skilled workers has on origin households.

9. h is important to note that Stahl and Arnold's numbers are from the mid 1980s, and thus we can surmise that they have only increased over the lasl lwo decades.

10. Several sources point out the dearth of iniimnation on women and migratmn that is only now beginning to change (DeLaet, 1999: Kanaiaupuni, 2000; Pessar and Mahler, 2003).

11. Stress also comes from concern for migrants settling in unknown or unfamiliar destinations. Transnational linkages and kin ties can mitigate these tensions even as they create ethnic en- claves for migrants ( Levitt, 1998).

t 2, The role of remittances in support ol" social programs and business investments dates to the mid- century and the bracero program in Mexico, t3raceros. Mexican men who worked short-term, set contracts in the U.S, tTom the 1940s to the early 1960s, had a small portion of their pay held in savings. These funds were earmarked for investments (often agricultural) to be made once the bracero returned to his hometown (Craig, 1971; Garcia y Griego, 1998). While the program was plagued with problems and hracero.s were abused--and lost perhaps billions of dollars to im- proper labor practices, leading to a class action lawsuit (Ponce de Ledn 2002)--during inter- views for my work, many Mexicans recalled the important role that h#z~ce#'os played in the management of village affairs (Cohen, 2004; ttancock, 19591.

13. [ noticed a major change in Mexican attitudes to thc border fifllowing the events of September i i, 2001. In the early to mid 1990s, moves lo ~he U.~ were lreated with some reservation, but generally were seen as extended commutes. Rclativos and friends on both sides of the bordcr eased tensions and the risks associated with crossing into the U.S. By the spring of 2002, Mexi- cans were much more hesitant to cross ihc border, but also suggested the further decline of


14.

15.

16.

Mexico's national economy (defined by declining tourism receipts in Oaxaca) created a difficult situation (Smith and Ellingwood, 2001). Some informants suggested the situation was one in which a person bad to choose between staying home and starving, or crossing the border (which might cost as much as $5,000) and risking capture by the police or border patrol, or perhaps an encounter with vigilantes. Finally, many migrant households told of members who would not return to Mexico for fear of crossing the border and the costs that might come with capture by border officials on either side (see Cohen 2004). Here I use transnationalism in reference to both moves made by migrants and the social relationships that underpin those moves. While most work celebrates the successes of transnational communities, Gutierrez (2004) reminds us that sometimes, communities of origin experience a great deal of stress and strain as they deal with the goodwill of"their" migrants. In this case, Zapotec migrants from the community ofYalfilag, Oaxaca, push their agendas in Mexico from homes in California, and by working with Oaxacan politicians they threaten the very traditional patterns of organization they purport to maintain. Working in Oaxaca, I found that migrant and nonmigrant households produce about the same average amount of maize (one-third of the maize they consume during a year). As the wife of a migrant in Santa Ana suggested, "I would be a fool to waste all of my husband's money on food so I let my father-in-law farm for me with my eldest son. He gives me some of the maize and that helps us make it" (Cohen, 2004).

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Remittance Outcomes and Migration