{ "title": "Migration and Remittances in Latin America and the Caribbean: Brain Drain Versus Economic Stabilization", "publication": "IMF Blog, June 29, 2017", "sourceUrl": "https://www.imf.org/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization", "canonical": "https://www.imf.org/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization", "overlayPath": "/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/index.md", "summary": "Outward migration has been an important phenomenon for the Caribbean; Central America, Panama, and the Dominican Republic; and Mexico.", "sections": [ { "heading": "Patterns of migration and remittances", "content": "- Outward migration has been an important phenomenon for the Caribbean; Central America, Panama, and the Dominican Republic; and Mexico.\n- In these countries, emigrants account for close to 10 percent of the population—compared with about 2 percent, on average, worldwide for emerging market and developing economies.\n- Emigrants send substantial sums of money, averaging about 6 percent of GDP, to support family members back home.\n- Some South American countries such as Paraguay and Uruguay have sizable emigrant populations, but remittance receipts in these countries are dwarfed by those to Central American and Caribbean neighbors.\n- The United States is by far the most important destination for Latin American and Caribbean migrants, with about two thirds of them living and working in the United States.\n- High dependence on a single destination country makes migrant remittances susceptible to economic ups and downs and immigration policy changes in the United States." }, { "heading": "Who are these emigrants?", "content": "- Emigrants from Mexico and Central America:\n - Tend to be younger (on average, about 20 years old).\n - Have lower levels of education compared with those from South America and the Caribbean.\n - Tend to work in lower-skilled occupations and have lower wages.\n - Send a higher share of their income back to their families.\n- Emigrants from South America and the Caribbean:\n - About 40 percent have attended college (or beyond).\n - A higher share are skilled workers (such as doctors, nurses, or engineers).\n- The Caribbean in particular has been suffering from “brain drain” due to a high share of skilled workers leaving their home countries." }, { "heading": "Effects on growth", "content": "- Departure of people of working age reduces the labor force and weakens growth in the home country; this effect is likely to be strongest where brain drain is significant.\n- Remittances bring benefits to families and provide financial resources for trade and investment.\n- Net effects depend on the profile of migrants and the amount of money they send home:\n - For countries with highly skilled emigrants (Caribbean countries and, to a lesser extent, South American countries), the negative impact on growth from emigration is not fully compensated by remittances.\n - For Central American countries, the negative effects of emigration seem to be broadly (or more than) offset by gains from their higher remittance receipts." }, { "heading": "Remittances as a source of stability", "content": "- Remittances are an important source of income and can support consumption when the domestic economy is not doing well.\n- Emigrants tend to send more money home following natural disasters, particularly to the Caribbean—the region most exposed to large natural disasters.\n- Remittances can support financial stability by strengthening borrowers’ capacity to repay their loans.\n- Remittances help generate revenues for the government, which taxes the spending from remittances.\n- In the Mexican case, migration and remittances can help reduce both poverty and inequality, as remittances go mostly to lower-income households." }, { "heading": "Policy recommendations — tilting the balance in a favorable direction", "content": "- Reduce outward migration while supporting remittances and encouraging productive usage by recipient families.\n- Structural policies to make it more attractive for people to stay and for emigrants to return:\n - Recognize professional qualifications earned abroad.\n - Reforms to limit brain drain, for example, by developing a medical tourism industry.\n- Policies to boost labor supply, in particular by raising women’s participation in the labor force, to offset adverse impacts of emigration on productivity.\n- Support development of formal financial channels for migrants to send money home and reduce the costs of sending money, including through new solutions like mobile money.\n- Improve the security situation in many Central American and Caribbean countries to relieve bottlenecks to productive use of remittances and encourage greater use for investment in small businesses.\n- For countries highly dependent on remittance inflows, ensure adequate financial buffers—such as central bank reserves—to compensate for a potential loss in remittances associated with negative economic shocks or shifts in immigration policy in host countries.\n\nSource: Migration and Remittances in Latin America and the Caribbean: Brain Drain Versus Economic Stabilization (Svetlana Cerovic, Kimberly Beaton, June 29, 2017).\n\n---\n\n\n References\n\n- Regional Economic Outlook\n- https://www.imf.org/wp-content/uploads/2017/06/IMF.LACMigrationRemittances.chart1.jpg\n- https://www.imf.org/wp-content/uploads/2017/06/IMF.LACMigrationRemittances.chart2.jpg\n- Our analysis\n\nSource: https://www.imf.org/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization" } ], "bullets": [ "[Markdown version](/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/index.md)", "[Structured JSON version](/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/index.json)", "[Bundle manifest](/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/bundle-manifest.json)", "Authors: Svetlana Cerovic, Kimberly Beaton", "Published: June 29, 2017", "Outward migration has been an important phenomenon for the Caribbean; Central America, Panama, and the Dominican Republic; and Mexico.", "In these countries, emigrants account for close to 10 percent of the population—compared with about 2 percent, on average, worldwide for emerging market and developing economies.", "Emigrants send substantial sums of money, averaging about 6 percent of GDP, to support family members back home.", "Some South American countries such as Paraguay and Uruguay have sizable emigrant populations, but remittance receipts in these countries are dwarfed by those to Central American and Caribbean neighbors.", "The United States is by far the most important destination for Latin American and Caribbean migrants, with about two thirds of them living and working in the United States.", "High dependence on a single destination country makes migrant remittances susceptible to economic ups and downs and immigration policy changes in the United States.", "Emigrants from Mexico and Central America:", "Emigrants from South America and the Caribbean:", "The Caribbean in particular has been suffering from “brain drain” due to a high share of skilled workers leaving their home countries.", "Departure of people of working age reduces the labor force and weakens growth in the home country; this effect is likely to be strongest where brain drain is significant.", "Remittances bring benefits to families and provide financial resources for trade and investment.", "Net effects depend on the profile of migrants and the amount of money they send home:", "Remittances are an important source of income and can support consumption when the domestic economy is not doing well.", "Emigrants tend to send more money home following natural disasters, particularly to the Caribbean—the region most exposed to large natural disasters.", "Remittances can support financial stability by strengthening borrowers’ capacity to repay their loans.", "Remittances help generate revenues for the government, which taxes the spending from remittances.", "In the Mexican case, migration and remittances can help reduce both poverty and inequality, as remittances go mostly to lower-income households.", "Reduce outward migration while supporting remittances and encouraging productive usage by recipient families.", "Structural policies to make it more attractive for people to stay and for emigrants to return:", "Policies to boost labor supply, in particular by raising women’s participation in the labor force, to offset adverse impacts of emigration on productivity.", "Support development of formal financial channels for migrants to send money home and reduce the costs of sending money, including through new solutions like mobile money.", "Improve the security situation in many Central American and Caribbean countries to relieve bottlenecks to productive use of remittances and encourage greater use for investment in small businesses.", "For countries highly dependent on remittance inflows, ensure adequate financial buffers—such as central bank reserves—to compensate for a potential loss in remittances associated with negative economic shocks or shifts in immigration policy in host countries.", "[Regional Economic Outlook](http://www.imf.org/en/Publications/REO/WH/Issues/2017/05/10/wreo0517?intcid=OBanner)", "[https://www.imf.org/wp-content/uploads/2017/06/IMF.LAC_MigrationRemittances.chart1_.jpg](https://www.imf.org/wp-content/uploads/2017/06/IMF.LAC_MigrationRemittances.chart1_.jpg)", "[https://www.imf.org/wp-content/uploads/2017/06/IMF.LAC_MigrationRemittances.chart2_.jpg](https://www.imf.org/wp-content/uploads/2017/06/IMF.LAC_MigrationRemittances.chart2_.jpg)", "[Our analysis](http://www.imf.org/en/Publications/WP/Issues/2017/06/29/Migration-and-Remittances-in-Latin-America-and-the-Caribbean-Engines-of-Growth-and-44956)" ], "alternates": { "markdown": "/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/index.md", "json": "/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/index.json", "bundleManifest": "/en/blogs/articles/2017/06/29/migrationandremittancesinlatinamericaandthecaribbeanbraindrainversuseconomicstabilization/bundle-manifest.json" }, "generatedAtUtc": "2026-08-27T21:25:01.106Z" }