1. , Division of Research Remittance Behavior in a New Region for Mexican Immigration: The Case of South Carolina Dr. Doug Woodward Director, Division of Research Professor of Economics W. Jared DuPree, Doctoral Candidate, University of South Carolina

2. The integration of national economies More open markets for international: Trade flows Investment flows Labor flows Understanding Remesas, Migradollars, Remittances

3. International Financial Flows Trade Exports and imports Other foreign exchange earned by tourist expenditures International capital (investment) Portfolio Bonds and stocks Foreign direct investment (FDI) has outpaced other financial flows Investment by multinational corporations new plants and large foreign acquisitions Immigration Legal and undocumented movement of people Leads to remittances (remesas) These are one-way transfers of income, like gifts, to the home country of the immigrant worker Are Remesas Stable or Going to Diminish Like Oil Revenue Over Time?

4. Overview of Presentation:  Review remittance trends in the U.S. and South Carolina  Explain the 2005 South Carolina survey  Present estimates of remittance trends based on the South Carolina study  Discuss implications for Veracruz

5. $45 Billion in Migradollars to Latin America in 2006 51 Percent Increase Since 2004

6. (in millions) Total Money Sent Remittances to Latin America from the U.S. : 2006

7. (in millions) Total Money Sent Remittances to Latin America from the U.S.: 2006

8. (in millions) Total Money Sent Remittances to Latin America from the U.S. : 2006

9. (in millions) Total Money Sent Remittances to Latin America from the U.S. : 2006

10. (in millions) Total Money Sent Remittances to Latin America from the U.S. : 2006

11. Estimates of Latino Remittances by Inter-American Development Bank RankStateTotal 1Maryland$2,897 2North Carolina$2,864 3Alabama$2,797 4Georgia$2,743 5Virginia$2,621 11South Carolina$2,261 16Tennessee$2,132 Source: Inter-American Development Bank ( 2004). Sending Money Home, The First State-by-State Analysis of US Remittances to Latin America. Top 5 remittance sending states with South Carolina and other Southern states.

12. South Carolina and Immigration South Carolina is a new receiving area Immigrant labor growing rapidly Little understood effects on the economy

13. U.S. Hispanic Population by Ethnic Subgroup Source: U.S. Bureau of the Census, March 2002.

14. South Carolina Hispanic Population by Ethnic Subgroup Source: U.S. Bureau of the Census, 2003 American Community Survey.

15. , Division of Research 2005 South Carolina Mexican Immigration Survey Sample: (N=381) Location: Mexican Mobile Consulates Questionnaire: 27 Questions - Anonymity & Confidentiality - $10 gift card for participating - Conducted in Spanish

16. Regions of Data Collection Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

17. Average Annual Income* *Annual income based on weekly wages over 50 weeks. Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

18. Industries Hiring Mexican Immigrants in South Carolina Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

19. Type of Work All (370)Midlands (93)Lowcountry (130) Upstate (147) academic 3 21 0 administration 9 15 3 agriculture 10 70 3 construction 124 2836 60 consulting 2 10 1 equestrian 3 30 0 fitness 2 11 0 food processing 4 31 0 general 22 11 20 housekeeping/home making 21 311 7 hospitality 5 13 1 janitorial 4 12 1 landscaping 24 313 8 laundry 2 20 0 manufacturing 18 60 12 nursery 1 10 0 poultry processing 13 101 2 restaurant 36 620 10 textiles 1 10 0 trade 62 1235 15

20. Time Living in South Carolina Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

21. Respondents’ Future Plans Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

22. States of Mexico Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

23. Respondents’ Home States* *Only those Mexican states whose aggregate numbers represented more than 1 percent of the respondent population are listed. Source: Mexican Immigrant Survey, 2005, Moore School of Business, University of South Carolina.

24. Percentage of Respondents with Bank Accounts Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

25. Top Reasons Indicated For Having No Bank Account Does not have proper documentation 58.9% Not enough money to save12.1% Not interested7.6% Don’t need it5.1% Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

26. Average Monthly Remittances Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina. Annual Remesas: $3396 per Mexican Immigrant in South Carolina

27. Number of Times that Remittances Are Sent Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

28. Theories of Changing Remittance Behavior A number of studies point towards the impact of acculturation and assimilation on financial and social behaviors. Assimilation is defined as becoming more like the majority culture. Acculturation is defined as the process of making sense of one’s culture as one comes in contact with another culture.

29. Hypotheses Latino communities tend to go through acculturation stages. 1 st Generation: Stick to culture of origin 2 nd Generation: Assimilate to majority culture 3 rd Generation: May attempt to bring old and new together Geographic region (current home) seems to have more impact on financial behavior than ethnicity. In other words, Latinos will tend to act more like the majority population of the region in which they reside. May be one reason why the longer a Latino stays in South Carolina, the less they send remittances to Mexico.

30. Hypotheses Continued… South Carolina immigrants seems to be in a stage 1 and 2 of acculturation because it is a new receiving area. Remittances likely decrease with time due to assimilation behaviors. Geographic region will likely dictate that Latinos will develop similar social and financial patterns of majority culture over time. As more Latinos enter into 3 rd, 4 th, and 5 th generation Latino families, more traditional patterns in lieu of majority customs likely to be seen in social and financial arenas.

31. Predicting Remittance Trends: Multiple Regression Analysis Those immigrants with the following attributes tend to send more money annually: Length of time in the U.S. in years (p<.003) * Income in $1000s (p<.002) * Number of Children in South Carolina household (p<.001) * Gender dummy variable (Female=1; Male=0) (p<.031) * Y = (-.163) Time + (.03) Income + (-1800.09) Children +(-1342.09) Gender + 3844.52 (constant) R Square =.139 Adjusted R Square =.116 Important Finding: The longer one stays in SC, the less they send. * Denotes statistical significance

32. Predicting Length of Stay in South Carolina: Multiple Regression Analysis Those immigrants with the following attributes are likely to stay longer in South Carolina (p<.000): Skilled Labor Dummy Variable (p<.038) * Own a Home Dummy Variable (p<.007) * Trips to Mexico in Last Five Years (p<.077) Number of autos (p<.000) * Number of people in household (p<.028) * Y = (1.495) Skilled Labor + (3.169) Own a Home + (.048) Trips to Mexico + (1.961) Number of Autos + (-.619) People in Household + 6.174 constant R Square =.626 Adjusted R Square =.530 * Denotes statistical significance

33. Growing Latino Population in South Carolina  Latino Population  Our current estimate: 197,868  34% annual growth rate over last three years  U.S. Census estimates 135,000 for 2006.  Current growth rates would increase Latino population to 350,000 by 2008. *Calculated Using Methodology of Kasarda & Johnson, 2006.

34. Re-estimated Latino Remittances Inter-American Development Bank $332 million from South Carolina to Latin America Moore School (USC): New Estimates Based on 197,868 Latinos in 2006 for South Carolina 66 percent of Latinos in the labor force $3396 annual Latino remittances $443 million for South Carolina $279 million Mexican remittances

35. Final Thoughts Mexican immigration in South Carolina is growing rapidly Current trends will create significantly higher remittance flows from South Carolina to Mexico in the near future. Remittance flows may fall off over the long run More understanding of how remittances are used in Mexico is needed. ?

36. How Recipient Households in Mexico Spend Remittances Source: El Impacto de las Remesas Familiares en México y su Uso Producti vo, Centro de Estudios Sociales y de Opinión Pública, Cámara de Diputados, Estados Unidos Mexicanos, December 2004.

37. Respondents Future Plans Source: Mexican Immigrant Survey. 2005. Division of Research, University of South Carolina.

38. Future Collaboration One problem with remittance flow: Often spent on consumer goods, raising local demand without any increase in local production (most of the goods purchased are produced outside the community). Encourage use of remittances in activities that will build a stronger local economy over the long run in Veracruz. A goal of a future joint project will be to provide a better understanding of investment prospects. Evaluating investment prospects represents a highly constructive role that University of South Carolina researchers could play, in concert with colleagues in Veracruz.