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Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants

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  • Vincenzo Caponi

    ()
    (Ryerson University, Canada and IZA and The Rimini Centre for Economics Analysis, Rimini, Italy.)

Abstract

Building on Borjas (1993) I develop an intergenerational model of self-selection of migration and education that allows for a more complex selection mechanism. In particular, it allows for the possibility that immigrants are selected differently depending on the schooling level they choose. As in Mayer (2005) I assume that agents are endowed with two abilities and use the intergenerational structure of the model to infer potential earnings of a person for different levels of education and in different countries. This makes it possible to quantify the ability or self selection bias of estimates of the return to education and migration. The model is estimated using data on Mexicans in the US from the CPS and on Mexicans residents in Mexico from the Mexican census. The findings are that there is a significant loss of human capital faced by immigrants that is not transmitted to their children. While immigrants are observed to earn less because they find it difficult to adapt their skills to the host country, their children earn more because they can inherit all the abilities of their parents, including that part that could not be used for producing earnings. Moreover, Mayer (2005) proves that the positive correlation between the two abilities creates a positive correlation between parentsÕ earnings and the probability that children attend college. In this paper, I find that this result is reinforced for migrants when they care about their children. In the case of immigrants, parents with larger amounts of intellectual ability tend to migrate more and tend to choose to remain high school educated. However, they migrate with the expectation of their children becoming college educated. Therefore, measures that rely on the earnings performance and educational attainment of immigrants underestimate the amount of human capital they bring into the host country.

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Bibliographic Info

Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 20-07.

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Date of creation: Jul 2007
Date of revision: Jul 2007
Handle: RePEc:rim:rimwps:20-07

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  1. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
  2. Hendricks, Lutz A., 2001. "The Economic Performance of Immigrants: A Theory of Assortative Matching," Staff General Research Papers 11931, Iowa State University, Department of Economics.
  3. Jeremy Tobacman & David Laibson, 2007. "Estimating Discount Functions with Consumption Choices over the Lifecycle," Economics Series Working Papers 341, University of Oxford, Department of Economics.
  4. Kurokawa, Yoshinori, 2006. "Skill Intensity Reversal and the Rising Skill Premium: Evidence from the U.S. and Mexico," MPRA Paper 14013, University Library of Munich, Germany.
  5. Card, David, 2004. "Is the New Immigration Really So Bad?," IZA Discussion Papers 1119, Institute for the Study of Labor (IZA).
  6. Gordon H. Hanson & Antonio Spilimbergo, 1996. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," Research Department Publications 4036, Inter-American Development Bank, Research Department.
  7. Borjas, George J., 1996. "The earnings of Mexican immigrants in the United States," Journal of Development Economics, Elsevier, vol. 51(1), pages 69-98, October.
  8. Daniel McFadden, 1987. "A Method of Simulated Moments for Estimation of Discrete Response Models Without Numerical Integration," Working papers 464, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Vincenzo CAPONI, 2010. "Heterogeneous Human Capital and Migration: Who Migrates from Mexico to the us?," Annales d'Economie et de Statistique, ENSAE, issue 97-98, pages 207-234.
  10. George J. Borjas, 1987. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
  11. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  12. Duncan, Brian & Trejo, Stephen, 2005. "Ethnic Identification, Intermarriage, and Unmeasured Progress by Mexican Americans," IZA Discussion Papers 1629, Institute for the Study of Labor (IZA).
  13. Adalbert Mayer, 2004. "Education, Self-Selection and Intergenerational Transmission of Abilities," 2004 Meeting Papers 107, Society for Economic Dynamics.
  14. Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 239-281, April.
  15. Gourinchas, Pierre-Olivier & Parker, Jonathan A, 2000. "Consumption Over the Life-Cycle," CEPR Discussion Papers 2345, C.E.P.R. Discussion Papers.
  16. Heckman, James & Scheinkman, Jose, 1987. "The Importance of Bundling in a Gorman-Lancaster Model of Earnings," Review of Economic Studies, Wiley Blackwell, vol. 54(2), pages 243-55, April.
  17. Heckman, James J & Sedlacek, Guilherme L, 1990. "Self-selection and the Distribution of Hourly Wages," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S329-63, January.
  18. Chiara Binelli, 2009. "The Demand-Supply-Demand Twist: How the Wage Structure Got More Convex," Working Paper Series 48_09, The Rimini Centre for Economic Analysis, revised Jan 2009.
  19. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
  20. Robert J. Willis & Sherwin Rosen, 1978. "Education and Self-Selection," NBER Working Papers 0249, National Bureau of Economic Research, Inc.
  21. Chiara Binelli & Orazio Attanasio, 2010. "Mexico in the 1990s: the Main Cross-Sectional Facts," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 238-264, January.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Why third generation immigrants earn less
    by Economic Logician in Economic Logic on 2009-11-27 15:59:00
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Cited by:
  1. Albornoz-Crespo, Facundo & Cabrales, Antonio & Hauk, Esther, 2011. "Immigration and the School System," CEPR Discussion Papers 8653, C.E.P.R. Discussion Papers.

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