IDEAS home Printed from https://ideas.repec.org/p/ecm/latm04/329.html

Migration, Trade and FDI in Mexico

Author

Listed:
  • William Maloney
  • Patricio Aroca

Abstract

Part of the rationale for NAFTA was that it would increase trade and FDI flows, creating jobs and reducing migration to the US. Since poor data on illegal flows to the US makes direct measurement difficult, this paper instead evaluates the mechanism behind these predictions using data on migration within Mexico where the census data permit careful analysis. We offer the first specifications for migration within Mexico incorporating measures of cost of living, amenities and networks. Contrary to much of the literature, labor market variables enter very significantly and as predicted once we attempt to control for substitutions vs. credit constraint effects. FDI and trade variables deter migration and appear to work through the labor market. Finally, we generate some tentative inferences about the impact on Mexico-US migration and find it to be of important magnitude.

Suggested Citation

  • William Maloney & Patricio Aroca, 2004. "Migration, Trade and FDI in Mexico," Econometric Society 2004 Latin American Meetings 329, Econometric Society.
    • Handle: RePEc:ecm:latm04:329
    as

    Download full text from publisher

    File URL: http://repec.org/esLATM04/up.6441.1083007066.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonathan S. Leonard & Rachel McCulloch, 1991. "Foreign-Owned Businesses in the United States," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 261-283, National Bureau of Economic Research, Inc.
    2. Larry A. Sjaastad, 1970. "The Costs and Returns of Human Migration," Palgrave Macmillan Books, in: Harry W. Richardson (ed.), Regional Economics, chapter 9, pages 115-133, Palgrave Macmillan.
    3. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    4. Lucas, Robert E.B., 1997. "Internal migration in developing countries," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 13, pages 721-798, Elsevier.
    5. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
    6. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    7. 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.
    8. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, vol. 89(5), pages 1337-1357, December.
    9. James R. Markusen & Stephen Zahniser, 1997. "Liberalization and Incentives for Labor Migration: Theory with Applications to NAFTA," NBER Working Papers 6232, National Bureau of Economic Research, Inc.
    10. Francisco L. Rivera-Batiz, 2018. "Can Border Industries Be a Substitute for Immigration?," World Scientific Book Chapters, in: Francisco L Rivera-Batiz (ed.), International and Interregional Migration Theory and Evidence, chapter 15, pages 287-297, World Scientific Publishing Co. Pte. Ltd..
    11. Katharine Donato & Jorge Durand & Douglas Massey, 1992. "Stemming the tide? Assessing the deterrent effects of the immigration reform and control act," Demography, Springer;Population Association of America (PAA), vol. 29(2), pages 139-157, May.
    12. Abowd, John M. & Freeman, Richard B. (ed.), 1991. "Immigration, Trade, and the Labor Market," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226000954.
    13. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    14. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-133, January.
    15. Markusen, James R & Venables, Anthony J, 1997. "The Role of Multinational Firms in the Wage-Gap Debate," Review of International Economics, Wiley Blackwell, vol. 5(4), pages 435-451, November.
    16. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, September.
    17. Gourieroux,Christian, 2000. "Econometrics of Qualitative Dependent Variables," Cambridge Books, Cambridge University Press, number 9780521589857, January.
    18. Vanderkamp, John, 1971. "Migration Flows, Their Determinants and the Effects of Return Migration," Journal of Political Economy, University of Chicago Press, vol. 79(5), pages 1012-1031, Sept.-Oct.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Frédéric Docquier & Elisabetta Lodigiani, 2010. "Skilled Migration and Business Networks," Open Economies Review, Springer, vol. 21(4), pages 565-588, September.
    2. Schejtman, Alexander & Berdegué, Julio A., 2006. "El Impacto Social de la Integración Regional en América Latina Rural," IDB Publications (Working Papers) 2327, Inter-American Development Bank.
    3. Alexander Schejtman & Julio A. Berdegué, 2006. "El Impacto Social de la Integración Regional en América Latina Rural," IDB Publications (Working Papers) 9125, Inter-American Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aroca Gonzalez, Patricio & Maloney, William F., 2005. "Migration, trade, and foreign investment in Mexico," Policy Research Working Paper Series 3601, The World Bank.
    2. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 869-924, December.
    3. Simon Winter, 2020. "“It’s the Economy, Stupid!”: On the Relative Impact of Political and Economic Determinants on Migration," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(2), pages 207-252, April.
    4. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    5. Hanson, Gordon H., 2010. "International Migration and the Developing World," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4363-4414, Elsevier.
    6. Manuela Angelucci, 2012. "US Border Enforcement and the Net Flow of Mexican Illegal Migration," Economic Development and Cultural Change, University of Chicago Press, vol. 60(2), pages 311-357.
    7. Orrenius, Pia M. & Zavodny, Madeline, 2005. "Self-selection among undocumented immigrants from Mexico," Journal of Development Economics, Elsevier, vol. 78(1), pages 215-240, October.
    8. Gordon Hanson & Chen Liu & Craig McIntosh, 2017. "The Rise and Fall of U.S. Low-Skilled Immigration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 83-168.
    9. Michael Clemens, 2014. "Does Development Reduce Migration? - Working Paper 359," Working Papers 359, Center for Global Development.
    10. Hagen-Zanker, Jessica, 2010. "Modest expectations: Causes and effects of migration on migrant households in source countries," MPRA Paper 29507, University Library of Munich, Germany.
    11. Clemens, Michael A. & Mendola, Mariapia, 2024. "Migration from developing countries: Selection, income elasticity, and Simpson’s paradox," Journal of Development Economics, Elsevier, vol. 171(C).
    12. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
    13. Mishra, Prachi, 2007. "Emigration and wages in source countries: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 82(1), pages 180-199, January.
    14. Christian Dustmann & Tommaso Frattini & Anna Rosso, 2015. "The Effect of Emigration from Poland on Polish Wages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 522-564, April.
    15. Zhiling Wang & Thomas de Graaff & Peter Nijkamp, 2018. "Barriers of Culture, Networks, and Language in International Migration: A Review," REGION, European Regional Science Association, vol. 5, pages 73-89.
    16. Diego R. Medina-Muñoz & Rita D. Medina-Muñoz, 2012. "Determinants of Expenditures on Wellness Services: The Case of Gran Canaria," Regional Studies, Taylor & Francis Journals, vol. 46(3), pages 309-319, June.
    17. Klaus Nowotny, 2011. "AFLA – Arbeitskräftemobilität und Fachkräftebedarf nach der Liberalisierung des österreichischen Arbeitsmarktes. Migrations- und Pendelpotentiale nach Ende der Übergangsfristen für die Arbeitskräftefr," WIFO Studies, WIFO, number 41563, June.
    18. Gordon H. Hanson & Raymond Robertson & Antonio Spilimbergo, 2002. "Does Border Enforcement Protect U.S. Workers From Illegal Immigration?," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 73-92, February.
    19. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    20. Hendrik Dalen & George Groenewold & Jeannette Schoorl, 2005. "Out of Africa: what drives the pressure to emigrate?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 741-778, November.

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:latm04:329. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.