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Liberalization and Incentives for Labor Migration: Theory with Applications to NAFTA

  • James R. Markusen
  • Stephen Zahniser

One of the motivations for NAFTA from the US point of view was to reduce the" incentives for Mexican migration into the US. Unskilled rural males are a primary source of" illegal immigration and also Mexico's relatively abundant factor. This group should therefore" be made better off by trade and investment liberalization according to the traditional" Heckscher-Ohlin model. Existing evidence, along with best guesses of many experts in the" area, suggest that NAFTA is unlikely to have a significant positive impact on this group least not within the time frame of several decades. We draw on a number of recent theoretical" contributions in order to offer reasons why NAFTA may not raise the wages of unskilled" Mexican workers.

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File URL: http://www.nber.org/papers/w6232.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6232.

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Date of creation: Oct 1997
Date of revision:
Publication status: published as Trade and Factor Mobility, deMelo, J., R. Faini and K. Zimmerman, eds., London: Cambridge University Press, 1999, pp. 263-294.
Handle: RePEc:nbr:nberwo:6232
Note: ITI
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  1. J. Peter Neary, 1995. "Factor Mobility and International Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 4-23, November.
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