Working Paper: NBER ID: w9242
Authors: Daniel Chiquiar; Gordon H. Hanson
Abstract: In this paper, we use data from the Mexico and U.S. population censuses to examine who migrates from Mexico to the United States and how the skills and economic performance of these individuals compare to those who remain in Mexico. We test Borjas' negative-selection hypothesis that in poor countries the individuals with the strongest incentive to migrate to rich countries are those with relatively low skill levels. We find that 1) Mexican immigrants, while much less educated than U.S. natives, are on average more educated than residents of Mexico, and 2) were Mexican immigrants in the United States to be paid according to current skill prices in Mexico they would tend to occupy the middle and upper portions of Mexico's wage distribution. These results are inconsistent with the negative-selection hypothesis and suggest, instead, that in terms of observable skills there is intermediate or positive selection of immigrants from Mexico. The results also suggest that migration abroad may raise wage inequality in Mexico.
Keywords: International Migration; Self-Selection; Wage Distribution; Mexico; United States
JEL Codes: F22; J01
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Mexican immigrants are more educated than residents of Mexico (I25) | contradicts negative-selection hypothesis (C52) |
| If Mexican immigrants were paid according to Mexican wage structure (J31) | they would occupy middle and upper portions of Mexico's wage distribution (D31) |
| Wage differentials between U.S. and Mexico decrease with increasing age and education (J31) | migration costs are lower for more educated individuals (J61) |
| Outflow of skilled workers (F22) | may contribute to increased wage dispersion in Mexico (F66) |
| Migration of individuals from middle of wage distribution (J69) | could exacerbate wage inequality in both sending and receiving countries (F66) |