http://www.chron.com/cs/CDA/ssistory.mp ... ss/3259015

July 8, 2005, 11:10PM
Cash sent back to Mexico goes fast, study says
Most families spend remittances on the essentials
By E. EDUARDO CASTILLO
Associated Press

MEXICO CITY - Despite increasing migration, money sent home to Mexico is almost all spent on bare necessities for migrants' families, with little left over for investment that could create new jobs, according to a government report released Friday.


Levels of migration and remittances sent home by workers abroad have both risen in recent years, and that growth rate is accelerating, said Elena Zuniga, the head of Mexico's National Population Council.

The number of undocumented migrants leaving for the United States grew by 48 percent in the period 1993-1997, 63 percent from 1998 to 2001, and 77 percent from 2001 to 2004, Zuniga said in a news conference at the presidential residence, Los Pinos.

Just as importantly, the amount of time undocumented migrants stay in the United States has grown, from an average of 6.9 months in the 1998-2001 period to 11.2 months between 2001 and 2004. Tighter border controls make it harder for migrants to make shorter, multiple trips.

"The increasingly strict border control ... has the effect of increasing undocumented migration and turning it into a more permanent migration," Zuniga said.

U.S. and Mexican officials had long hoped that that rising tide could help develop businesses in Mexico.

Treasury officials say remittances grew to $16.6 billion in 2004, a 24 percent increase over 2003 and second only to Mexico's oil income. State and federal officials have designed programs to encourage investment by migrants.

But a new study by the population council shows the average amounts sent home are so small they basically buy only food, clothing and health care.

Less than 10 percent of remittances are used for investment or savings, the study found.

"This spending, in reality, constitutes an investment in human capital, in health and education, among other areas," the council said.

However, the 1.43 million households that received remittances in 2004 â€â€