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Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants

Listed author(s):
  • Caponi, Vincenzo

    ()

    (CREST)

Building on Borjas (1993) I develop an intergenerational model of self-selection of migration and education that allows for a complex selection mechanism. In particular, it allows for the possibility that agents are selected differently depending on the schooling level they choose. As in Mayer (2005) I assume that agents are endowed with two abilities, manual and intellectual, 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 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, in the case of immigrants, parents with larger amounts of intellectual ability 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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2431.

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Length: 58 pages
Date of creation: Nov 2006
Publication status: published in: International Economic Review, 2011, 52 (2), 523 - 547
Handle: RePEc:iza:izadps:dp2431
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  1. Adalbert Mayer, 2004. "Education, Self-Selection and Intergenerational Transmission of Abilities," 2004 Meeting Papers 107, Society for Economic Dynamics.
  2. Card, David, 2004. "Is the New Immigration Really So Bad?," IZA Discussion Papers 1119, Institute for the Study of Labor (IZA).
  3. 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).
  4. Flavio Cunha & James Heckman, 2007. "The Technology of Skill Formation," NBER Working Papers 12840, National Bureau of Economic Research, Inc.
  5. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 7-36, October.
  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. 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 329-363, January.
  8. Yoshinori Kurokawa, 2009. "Is a Skill Intensity Reversal a Mere Theoretical Curiosum? Evidence from the U.S. and Mexico," Tsukuba Economics Working Papers 2009-010, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
  9. David Laibson & Andrea Repetto & Jeremy Tobacman, 2007. "Estimating Discount Functions with Consumption Choices over the Lifecycle," Documentos de Trabajo 236, Centro de Economía Aplicada, Universidad de Chile.
  10. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  11. Vincenzo Caponi, 2010. "Heterogeneous Human Capital and Migration: Who Migrates from Mexico to the us?," Annals of Economics and Statistics, GENES, issue 97-98, pages 207-234.
  12. Pierre-Olivier Gourinchas & Jonathan A. Parker, 1999. "Consumption Over the Life Cycle," NBER Working Papers 7271, National Bureau of Economic Research, Inc.
  13. George J. Borjas, 1987. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
  14. Hendricks, Lutz A., 2001. "The Economic Performance of Immigrants: A Theory of Assortative Matching," Staff General Research Papers Archive 11931, Iowa State University, Department of Economics.
  15. 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.
  16. 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.
  17. 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.
  18. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
  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. James Heckman & Jose Scheinkman, 1987. "The Importance of Bundling in a Gorman-Lancaster Model of Earnings," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 243-255.
  21. 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.
  22. 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.
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