each municipality to the nearest international airport. However, this measure does not accurately estimate the cost of informal remittances for each municipality because it is difficult to know the exact itinerary of returning migrants or _encomenderos_ .

_E. Economic activity:_ To control for the potential effect of an increase in remittances in places hit hardest by the pandemic early on (due to an increased altruism motive), we build a Bartik-style measure of local labor market shocks at the municipal level during our period of analysis. For each municipality we estimate shocks as the expected change in employment by multiplying employment shares in January 2020 by sector at the municipal level with changes in employment in these sectors at the national level between January and June 2020. This index can be interpreted as the predicted changes in employment at the municipal level due to industry composition in the local labor market and industry-specific national employment changes during the first year of the pandemic.<sup>13</sup> _F. Bank account data:_ Data from wage and transaction accounts at the municipal level come from Mexico’s financial regulator—the Mexican National Banking and Securities Commission (CNBV). This public database provides monthly municipal-level data on the number of wage and transaction bank accounts. Transaction accounts are the most common bank accounts and can be opened (with minimum requirements) by any individual in Mexico. In contrast, wage accounts are usually opened by an employer and require the holder to be formally employed by a company associated with the bank. This distinction is relevant for our analysis since an increase in demand for bank accounts that arises from a formalization of remittances (i.e., electronic transfers) should relate specifically to transaction accounts. However, controlling for the number of wage accounts at the municipal level helps to mitigate the bias introduced by other confounding variables that potentially affect the number of transaction accounts and remittances (e.g., local shocks).

_G. Household remittances:_ Data from the National Survey of Household Income and Expenditure (ENIGH) provide information about household income and expenditure sources, uses, and distributions, including income from remittances. ENIGH also details the occupational and sociodemographic characteristics of household members. We obtained access to the 2016, 2018, and 2020 surveys. Thus we can provide estimations at the household level of total remittances—that is, those received through both channels.

_H. Wage replacement rates:_ To test the hypothesis that the CARES Act contributed to the observed growth in remittances across Mexican municipalities, we used microdata on the unemployment insurance (UI) system to estimate wage replacement rate distributions by US state from Ganong et al. (2020).

_I. Additional controls:_ To control for potential confounding elements, we collected data from two additional sources. First, we obtained measures of COVID-19 incidence at the municipal level from the COVID-

> 13This Bartik-style instrument for labor demand shock at the local labor market level has been widely used in the literature. For a recent article, see Notowidigdo (2020).

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