Private money for public good: the impact of remittances on economic development in Mexico and El Salvador

This research project explores the linkages between remittances and economic development in Mexico and El Salvador. Incorporating micro-level data in the form of case studies as well as macro-economic indicators, the research analyzes the impact of remittances on economic growth, poverty, and inequality from 1995 to 2005. By including both quantitative and qualitative data, the objective is to transcend the empirical analysis and investigate the broader social framework of remittances. The results of this interdisciplinary model show that while remittances may be positively correlated with economic growth under specific empirical circumstances in each country, they cannot be connected conclusively with reductions in poverty and inequality. Based on these findings, policy makers are encouraged to create an environment that will enable recipient households to direct remittances to more productive ends for long-term economic development, or as the title of this project suggests, to channel private funds for public benefits.