Migrant wages and remittances to Latin America and the Caribbean in 2023

In 2023, the remittances received by the countries of Latin America and the Caribbean reached 154,511 million dollars. This value is slightly lower (0.9%) than what we had predicted in our annual projection. The difference is largely due to lower-than-expected growth in the total wage bill of migrant workers in the United States during the final months of 2023.

REMITTANCES TO LATIN AMERICA AND THE CARIBBEAN (2001-2023)
Billions of US Dollars

The impact of employment and salaries of migrants on remittances

One of the determining factors for remittances is undoubtedly the employment and income of migrants (although clearly not the only factor). As an example, it is observed that the total wage bill, composed of the average income and the number of employed workers, for Mexican migrants in the United States has a positive and very strong relationship with the remittances sent by these migrants to their country of origin.

According to monthly data from the last 5 years, Mexicans send on average 17.3% of the salary they generate each month. This percentage is affected by other factors that usually modify remittances sent, such as the income and economic situation of the receiving families, extraordinary needs that arise from national disasters and other types of crises, among others.

Total wage bill and remittances of Mexican migrants in the United States (2019-2024)
Billions of US dollars

During the last quarter of 2023, especially in the month of November, a decrease was observed in employment and wages of some groups of migrant workers from Latin America and the Caribbean residing in the United States, especially those of Mexican origin. The total wage bill of these workers decreased by 11.9% between October and November, mainly due to a reduction in full-time workers towards the end of the year. In contrast, the number of part-time migrant workers remained constant or grew slightly.

Correlation (2019-2024)
Monthly values

Meanwhile, the average monthly salaries of part-time and full-time employed migrants during the last quarter of the year also showed decreases that affected the wage bill, and with it a decrease in the income of migrants in the United States, especially those from Mexico and Honduras.

At the end of the year, the total wage bill of migrants from the region in the United States reached US$630 billion , an amount higher than the GDP of most Latin American and Caribbean countries, with the exception of Brazil and Mexico, and similar to that of Argentina.

Average monthly income and monthly wage bill of Latin American and Caribbean immigrants in the United States (December 2023)

Despite the decrease observed in the last months of the year, the average monthly income in 2023 for Mexican migrants in the United States reached US$3,738, which is 3.4% higher than what was observed a year earlier, which largely explains the record remittances for the year. This is especially true when taking into account that the employed labor force of LAC migrants in the United States was 15.8 million people, similar to that observed a year earlier.

During the last quarter of 2023, a 3.6% decrease was also observed in the growth rate of LAC migrants employed in Spain, compared to what had been observed in previous quarters. This also affected the wage bill of migrants from the region in Spain, and therefore slightly reduced their ability to send remittances.

Employed migrants by nationality in Spain 2022-2024
(Thousands)

The decrease in the growth rate of migrants' income in their main destination countries caused a slightly lower growth in remittances than expected at the end of the year. At the annual growth rate level, remittances showed a growth of 8.5% compared to the values ​​of 2022 (less than the 9.5% that we had estimated), which reinforces the conclusions of the annual report on the recovery of these flows towards the trend levels that had been observed before the pandemic.

Remittances by subregion in 2023

At the subregion level, the greatest growth in remittances received was recorded in Central America, reaching a growth rate of 12.2%, lower than that observed the previous year, although higher than that observed for the entire LAC region.

Theseare the countries that received the highest levels of remittances in Central America:

• El Salvador received US$8.182 billion in remittances in 2023.
• Guatemala received US$19.804 billion in remittances in 2023.
• Honduras received US$9.177 billion in remittances in 2023.

These three countries combined for 85% of the total remittances that the Central American region received during 2023.

In 2023, Mexico received remittances for a total of 63.313 billion dollars, which meant a growth of 8.2% compared to the previous year, lower than that observed during the previous year. The remittances that Mexico received during 2023 represented 41% of the total remittances received throughout Latin America and the Caribbean.

REMITTANCES TO LATIN AMERICA AND THE CARIBBEAN (2013-2023)
(Millions of US dollars)

Remittances received by the countries of South America reached 29.397 billion dollars, for growth of 7.5% compared to the previous year, less than that observed a year before, but above the average over the last decade. Colombia was the country that received the most significant amount in the South American region (US$10.091 billion) and constitutes 34.3% of the total remittances received in South America.

In the case of the Caribbean countries, they received a total of 18.209 billion dollars, which represented growth of 2.8%, significantly higher than that observed the previous year (which had been negative), even without reaching the average rate of growth of the last 10 years. The Dominican Republic received 55.8% of the total remittances received in the Caribbean, for an income of 10.157 billion dollars.

Outlook for remittances to Latin America and the Caribbean for 2024

During the first months of 2024, the total wage bill of migrants in the United States and Spain maintained the trend observed during the last months of the previous year, with signs of lower growth in the month of March. Thus, we estimate that remittances received in LAC will show a growth rate close to 2.5% as compared to the same quarter of the previous year. This will mean an approximate inflow of $36.124 billion during the first quarter of 2024.

Income in the countries where LAC migrants reside is expected to maintain current trends, so remittances will depend on changes in the salaries and labor structure of emigrants from the region. In this sense, it is expected that the growth rates observed in the first quarter of the year will accelerate during the second quarter of the year, following their usual seasonal patterns.

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