Return Migration and Financial Inclusion in Mexico

Migration between Mexico and the US has seen a sharp reversal. Since 2007 more Mexicans are returning home relative to those who are migrating to the United States. In light of recent research that finds that migrants have positive effects on their origin communities upon return, this paper studies the potential effects of return migration on financial inclusion. We find that municipalities with higher return migration rates are more likely to have more bank branches and fixed-term accounts per capita. Also, our results are suggestive of either negative or no effect of return migration on external financing. A better understanding of the overall effects of international migration on financial inclusion is important, as the positive effects of financial inclusion on economic development are well established.