Venezuelan migrants - CBP One
Venezuelan migrants use the CBP One mobile application created by the United States to try to make an asylum request appointment AFP / HERIKA MARTINEZ

It has long been reported that immigrants are vital to the U.S. economy. They often work essential jobs in industries such as agriculture, construction and hospitality, where employers typically struggle to hire. Now, new data from The Dialogue, a nonprofit organization that promotes social equity in Latin America, shows the different ways in which migration also impacts the countries these people leave.

Migrants who leave their home country send money back home through remittance services. In Latin America and the Caribbean, remittances from migrants traveling to the U.S. now make up 5% of the region's total national income.

According to The World Bank, remittance flows into Latin America and the Caribbean increased by 11.3% in 2022 and reach $145 billion. The increase is a result of the strong labor market in the U.S. according to the World Bank.

Mexico remained the highest receiver of remittances, accounting for $6.1 billion of the $145 billion sent throughout Latin America and the Caribbean. However, Counties with small GDPs, such as Guatemala, Honduras and Nicaragua, among others, saw a significant increase in inbound remittances in 2022. According to The Dialogue, countries with fragile economies have become reliant on remittances.

"The most fragile states migrant-sending countries have become greatly dependent on family remittances, a situation pointing to the economic conditions in those states, and also to what could seem to be a perversity in politics: expelling citizens to get them to remit to families," reads an excerpt from the report.

The use of sending money through remittances has also increased with the recent migrant crisis. And now it is more common to see remittances originate from Latin America and the Caribbean, not just the U.S. anymore.

According to the International Monetary Fund (IMF), while remittances impact the economies of Latin America and the Caribbean, their contributions are often outweighed by the reduction in skilled labor from migrants leaving the country, which is often referred to as "brain drain."

Brain drain affects countries differently, according to the IMF. For example, countries with skilled laborers are more likely to see negative GDP growth despite the influence of remittance money.

To avoid brain drain, the IMF recommends that countries where migrants originate begin to build policies that encourage their residents to remain in the country and for migrants to return home. Countries should also set policies that encourage families to use their inbound remittances for "productive" uses, like repaying loans, which can also offset the negative financial impact caused by migration.

© 2024 Latin Times. All rights reserved. Do not reproduce without permission.