Remittances and the Creation of Micro Enterprises in Huandacareo, Michoacán

Abstract

The productive use of remittances sent to Huandacareo, Michoacán, by individuals who migrate to the United States has not significantly contributed to the economic growth of the city. However, it has economically benefited the families that have created micro enterprises in the locality and employed a good number of workers outside these families. To design and conduct the study, a survey of businesses located in downtown Huandacareo was carried out, focusing on those that used or currently use remittances for their establishment and operation. It was found that, out of 152 businesses, only four percent use remittances, and therefore, life histories were taken as a research method. It was discovered that return migrants are more likely to be self-employed than non-migrants, and that both return savings and the frequency of job changes during migration increase the likelihood of return migrants being self-employed. These findings suggest that (a) return migration can help revitalize rural economies and alleviate poverty in the less developed areas of Michoacán; and (b) repatriated capital is a key and stimulating factor for promoting entrepreneurial activities.