Mexico: Remittances impact on crime

Remittances and the Impact on Crime in Mexico
IADB.ORG PAPER Steve Brito, Ana Corbacho, René Osorio

Abstract
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This working paper studies the effect of remittances from the United States on
crime rates in Mexico.The topic is examined using municipal level data on the percent of household receiving remittances and homicides per 100,000 inhabitants. Remittances are found to be associated with a decrease in homicide rates. Every 1 percent increase in the number of household is receiving remittances reduces the homicide rate by 0.05 percent. Other types of crimes are analyzed, revealing a reduction in street robbery of 0.19 percent for every 1 percent increase in households receiving remittances. This decrease is also observed using a state – level panel in another specification.
The mechanisms of transmission could be related to an income effect or an incapacitation effect of remittances increasing education, opening job opportunities, and/or reducing the amount of time
available to engage in criminal activities. Read Article