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Migration, Trade and FDI in Mexico

Author

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  • 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
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    File URL: http://repec.org/esLATM04/up.6441.1083007066.pdf
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Frédéric Docquier & Elisabetta Lodigiani, 2010. "Skilled Migration and Business Networks," Open Economies Review, Springer, vol. 21(4), pages 565-588, September.
    3. 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.

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    More about this item

    Keywords

    Migration; Labor Market adjustment;

    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

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