Remittance Income and Crime in Mexico

ABSTRACT This study examines the relationship between remittance inflows and criminal activity in Mexico, a country with persistently high crime rates and among the world's top remittance recipients. Using a 41‐quarter panel dataset of municipalities covering 2013–2023, the analysis estimates elasticity parameters linking remittance income to different crime categories. The results reveal that remittances are associated with reductions in violent crime but increases in property crime. The effects are stronger in municipalities with higher remittance intensity and deeper poverty, aligned with the idea that local conditions shape the criminal environment. Robustness checks, including dynamic specifications, lag structures, and an instrumental variable strategy based on a shift‐share design, support a causal interpretation. These findings contribute new evidence to the literature on the socioeconomic determinants of crime and highlight the complex behavioral effects of private income transfers, with implications for both social protection policy and public safety.