I looked at how ten Latin American and Caribbean countries are economically dependent on their citizens who live outside their countries. (See the list at the end, below). For the most part, the great majority of their expatriate citizens are in the United States.

Let’s call these ten countries the American Basin of foreign labor. Since 1960, they make up 20 million or 45% of all immigrants today. They include 4 of the top 10 countries of origin of American immigration since 1960.

The American Basin has a blended average per capita income of $17,000. 21% of the citizens live outside their country. Remittances back to the Basin counties are equivalent to 8% of Gross National Product.

A few of these countries are very little dependent on expatriate labor. Notable is Costa Rica, with per capita income of $20,000, less than 3% of its population outside, and with extremely low remittances as percentage of GDP (0.5%). Costa Rica has by far the lowest corruption rating of the ten countries.

The extreme opposite is Haiti. Its per capita income is $3000, 14% of its citizens live outside, and remittances are 18% of GDP. The following countries have remittances > 19% of GDP: El Salvador, Haiti, Honduras and Jamaica

The ten countries: Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, and Panama. Cuba is not included because it is missing from some key databases.

Data sources: 
emigration

remittances

GDP per capita

Also, detailed analysis of global and regional trends are available in the Migration and Development Brief 34 at www.knomad.org 

Jorge Castaneda, a Mexican who has spent many years in the U.S, as a student, faculty member, and diplomat, has written America Through Foreign Eyes (2020). He writes with sometimes unsettling insight about the United States. He devotes much attention to immigration, in four frames of reference:

The role of early European migration: European migrants killed and drove out Native Americans, imported slaves from Africa, drove out Mexicans. They did not bring over the authoritarian European institutions of class, church and state. These early white European migrants established the first mass middle class in the world. This social/political arrangement, internally democratic for white males and anti-democratic to all others, is the hallmark of America political culture. Voter suppression efforts today hark back to the exclusive democracy of the 18th C. [Castaneda does not use this term, but he is saying that from the first European settlements the U.S. has performed as a gate community.]

The role of immigration in American 20th Century economic prosperity: “American openness to the rest of the world…has made an enormous difference in terms of plowing invention in the profits. It could not flourish without a welcoming attitude toward immigration, without which these inventors would not have ventured far from their shores. Had their products, services, attitudes and experimentation not been well received in the United States, they would not have thrived.” (page 146).

America as the engine of today’s global modern mass culture: “Why have so many foreign cultural talents worked in the United States? …. United States is the first country to produce a mass culture. While over the centuries, European, Latin American, and Asian nations constructed literature, philosophy, art, architecture, and music for the very few, the United States lacked the authoritarian history, centralized religion, and monarchy or institutions that favored elitist culture. Instead, with the emergence of the world’s first middle class society in the earlier early 20th century, cultural products were generated and for these new consumers in the same way as cars, homes, and ice boxes.” (page 59). This feature of American culture continues to attract outstanding cultural talent from around the world.

On immigration of lower skilled workers: America has a long tradition of importing Latino workers to meet the labor demand of employers. American attitudes about immigration mix pragmatism and hypocrisy. We want these workers to keep costs of goods and services low but we also want to say it must be legal. This results in selective immigration law enforcement. [PFR: failure of every administration to impose effective demands on employers to verify employment status is a feature of selective enforcement.] Latinos are a “better fit” in the US than migrants to Europe from Muslim and African counties, in part because their religious practices are more compatible. The real reason for conservative opposition to legalization is that those legalized will bring their families, and two thirds will vote Democratic.

I recently posted about the higher output in scientific research in the U.S. Now let’s look at the wage impact of a less educated worker migrating from a developing country to the U.S. It turns out that the person’s real wage goes up four times, and this is due largely to higher productivity in the U.S.

Researchers estimated the income differences between 42 developing countries and the United States. They focused on males 35–39 years old, with nine to twelve years of education acquired in the their home country. They used the real cost of living gap. (For example, in 2021 you can have the same standard of living in Colombia with 43% of the income in the U.S.; in Nigeria, 36%). They then compared the wage one receives in the home country vs. the U.S. Wages in the U.S. are so much higher that they far make up for the higher cost of living.

The researchers found that these working migrating to the U.S. increase their real earnings by 395% or more.

The real wage gap can be mostly explained by higher productivity of the American workforce. How does higher productivity happen? Through three forces: more technological know-how; efficiency of production involving many factors (such as quality of transportation); and the state of education. (From Productivity Differences Between and Within Countries, by Daron Acemoglu and Melissa Dell, 2010.)