In today’s smaller world, immigrants to the United States retain strong ties to families left behind. These ties mean that every dollar a new immigrant earns through hard labor in the United States is shared with the poor and hungry of the developing world. Private remittances from workers in rich countries (a designation that includes the oil-rich countries of the Middle East as well as Europe, the United States, and Canada) exceed official foreign aid in most parts of the world. In many parts of the world, remittances are far bigger even than private foreign investment. Billions of dollars flow to relatives who remain in villages not only in Mexico but the Philippines, Morocco, Bangladesh and many other countries. Bootstrap private “foreign aid” is one of the important results of international migration.

The table below shows how important this private foreign aid is to poor countries. For the world as a whole, there is $2.61 of private foreign aid for every dollar of aid from official institutions. In some countries this figure is much, much larger. In the Philippines, there is more than $25 of private aid for every dollar of official aid; in India, this reached $31, and in Mexico, there is $150 of private aid for every dollar of official aid. In low income countries, as well as in some middle income countries like Morocco and Mexico, private remittances exceeded foreign investment as well as official foreign aid. According to the World Bank, in 2004 private foreign aid to Mexico reached $1.5 billion per month.

A new study by Dean Yang of the University of Michigan looks carefully at the consequences of these private remittances, in the Philippines. Professor Yang uses sophisticated statistical methods to infer important consequences of remittances:

• Remittances increase school attendance and decrease employment of school age children.
• Remittances increase work in families’ own businesses.
• Remittances increase new business start-ups, especially in transport and small-scale manufacturing.

Professor Yang also shows that a substantial portion of any increase in remittances goes into families’ investment in education, business, and improving the home. Remittances are important for basic food and shelter, but as remittances grow, they are increasingly used to make permanent improvements in the capacity of poor families left behind to raise their own incomes.

Listening to the heated rhetoric about illegal immigrants, a visitor from another planet might think that undocumented workers are all terrorists, criminals, and ne’er-do-wells. Against this hostile backdrop, it is worth remembering that the majority of Americans have many ancestors who arrived on these shores when there were no immigration restrictions. Our ancestors arrived here simply to build a better life for themselves and their loved ones. That is what the vast majority of today’s immigrants are after too.

For those of us who want to see an end to child labor, who want to see poor people helping themselves and their families, and to see direct people-to-people aid instead of official dealings among big institutions, what could be more encouraging than the remittances that a generous immigration policy can make possible for enterprising migrants?

Bernard Wasow is a senior fellow at The Century Foundation.