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This research intends to study the effect of migration flows and migrant networks hypothesizing that freer migration leading to bigger migrant networks are beneficial for the economies of the sending countries, using the New Economics of Labor Migration theory which views migration as an economic decision made by migrants and whose return can be seen as remittances. The data covers a period from 1980 to 2010 and is analyzed through Cross-Sectional Time-Series Feasible Generalized Least Squares. The countries analyzed are Belize, Costa Rica, El Salvador, Nicaragua, Honduras, Guatemala, Panama, and Mexico, as the sending countries, finding that the very moment when migrants leave their home countries, these economies do not seem to experience a statistically significant shock, while once migrants have established themselves in their new host country as part of migrant networks, the effects on the economies of the sending countries becomes positive and statistically significant, as well as the remittances they send.

Migration from Central America and Mexico to the US: Does the Movement of People Affect the Economies of the Sending Countries?