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Tomatoes or Tomato Pickers? Free Trade and Migration Between Mexico and the United States
Journal of Applied Economics
Abstract
This paper examines the relationship between trade liberalisation and migration in the case of Mexico. The increasing bilateral trade between Mexico and the United States after signing the North American Free Trade Agreement (NAFTA) was supposed to stem the illegal Mexican migration flow by contributing to economic growth and job creation in both countries. Twelve years after the treaty has come into effect, questions emerge about the extent to which NAFTA was able to reduce the migration pressure: are trade and migration substitutes like the policy-makers had assumed or are they complements? Using monthly data from 1968 until 2004, we estimate a distributed lag model with the number of apprehensions at the US- Mexican border as a proxy for illegal migration. The results indicate that increasing trade flows cause larger illegal migration from Mexico to the United States.JEL classification codes: C22; F00; F10; F22.
... Carbaugh (2007) and for an empirical analysis, see, e.g. Río and Thorwarth (2009). 4. The role of trusted intermediaries, such as migrants, has also been evident historically (e.g. ...
Protectionism and anti-globalization tides have been rising already before the COVID-19 pandemic, with Brexit and the China-U.S. trade war, as two examples. A continued disruption to global trade, investment and value chains could worsen global development. Economic recovery will require restoring firms’ ability to trade, offshore and invest globally. To achieve this, it will be useful to understand the role of migration for foreign trade, investment and other aspects of internationalization. In this paper we review and discuss over 100 papers published about migrants’ roles on international trade, foreign direct investment and offshoring. Although the evidence suggests that migration facilitates trade and internationalization, we also note substantial gaps and inconsistencies in the existing literature. The aim of this paper is to encourage further research and assist policymakers in their efforts to promote economic recovery including internationalization.
... Acevedo and Espenshade (1992) and Martin (1993) show that in the short-to-medium period NAFTA is likely to increase migrations from Mexico to the U.S., but that narrowing the wide economic differentials between the two countries could substantially reduce the migratory flow. Martin (1993) predicts how NAFTA's 1994 trade liberalization influences short and long-term migration patterns between Mexico and the U.S. His prediction was in part confirmed by Del Rio and Thorwarth (2009), who look at more recent data for the U.S. and Mexico. In line with Lopez and Schiff (1998)'s theoretical predictions they find no evidence of decreasing flows of illegal migrants between Mexico and the U.S. when bilateral trade increases (with the creation 1970 1980 1990 2000 1970 1980 1990 2000 1970 1980 1990 2000 1970 1980 1990 2000 of NAFTA). ...
In the attempt to reduce migration pressure, since 1995, the European Union has been planning to establish a free trade area with developing countries bordering the Mediterranean Sea. The process is still ongoing. Our paper tests whether it is likely to be an effective policy. We estimate a gravitational model of bilateral migrations on bilateral exports from the Mediterranean Third Countries (South) to the European Union (North) over the period 1970-2000, using different specifications. We find, in line with most of the literature, a significantly positive correlation (called “complementarity”) between exports and migrations from the South to the North. Then we go one step further, trying to solve the potential endogeneity problem using average trade tariffs and bilateral exchange rate volatility as instruments for trade. Based on the OLS as well as the 2SLS results, liberalizing trade in the area ofthe Euro-Mediterranean partnership does not seem to be an effective policy to mitigate the migration flows, at least in the short run.
The effects of immigration on a host country’s economy and welfare have been widely studied. Little research has been done on the causality between immigration patterns and economic factors. The purpose of this study is to empirically test the immigration theory of labor supplydemand pull. The author uses a Vector Error Correction Model and annual data to determine if Southwest Border apprehensions Granger-cause employment level changes in the U.S. The results suggest that U.S. employment and physical capital investments Granger-cause Southwest Border apprehensions in the short run, while U.S. employment, investments, and economic growth Granger-cause SW Border apprehensions in the long run. Shocks to employment and physical investments have nonlinear effects on Southwest Border apprehensions. A 1-millionunit annual increase in employment in the United States leads to a decrease of 80,000 Southwest Border apprehensions the following year. This is followed by an increase of 67,922 apprehensions the year after. This empirical evidence supports the theory that U.S. employment creates demand for Southwest Border apprehensions, not the other way around.
Impact of Training and Development on Nursing and Technical Staffs’ Performance and Motivation: A case of secondary health care sector at Shamsi hospital Karachi.
Hina Zahoor
Ghulam Muhammad
Nasır Mustafa
Abstract
Training and development is one of the major issues in every organization. It is the only way to develop organizational intellectual property. Through the development of employee knowledge, skills, ability, competencies and performance, training provide benefits to the employees and organization The role of training and development programs and practices empower top managements to construct healthier working environment that improves and increase the level of motivation, commitment and loyalty of employees to their performance. Our study focuses to find out the impact of training and development on nurses’ and technical staffs’ performance and on their work motivation in secondary health care unit as there is scarcity of data related to secondary health care unit. Two hypotheses are analyzed by using convenient sampling technique.. Hypothesis is formulated and tested with different statistical tools in the study. Quantitative research is conducted through Questionnaire which was filled by the nursing and technical staff at Shamsi Hospital. Qualitative research was done by conducting interviews. For quantitative data analysis, I applied reliability, descriptive, linear regression and correlation coefficient through IBM SPSS21.while analyzing qualitative data, I followed transcribing, coding and categorizing steps. Results demonstrate the positive relationship between Independent variable (Training and development) and Dependent Variables (Employee Performance and Work Motivation. Besides the above findings I also found that reward system also affects the motivational level of employees.
Keywords: Secondary health care unit, Training and Development, Work Motivation, Employee’s performance, Expectancy theoryç
JEL Code: M, M53
p class="western" style="margin-bottom: 0cm; line-height: 100%;" align="justify">La presente investigación analiza la aparición de áreas y ciudades binacionales a lo largo de la frontera entre Estados Unidos y México. Es decir, si son fruto de la interacción o bien de la integración. En este sentido, pareciera que este fenómeno ha vivido un incremento constante y progresivo en los últimos tiempos, a pesar de la combinación de medidas represivas ante la migración y su asociación a la inseguridad y el terrorismo. Se sostiene que las áreas binacionales serían un resultado no esperado de la creciente represión a la migración latinoamericana y, por otra, efecto de la difuminación de fronteras para mercancías y capitales entre los miembros del Tratado de Libre Comercio de América del Norte. En este sentido, el estudio de caso de la frontera San Diego – Tijuana no pareciera dibujar un área de convergencia económica, cultural y social a la luz de los datos, aunque sí de creciente interacción económica.</p
This paper establishes an inventory of international migration and trade relationship. In the new global context, this link is complex and multidimensional. It includes political, economic, social, and legal, it involves many actors like international organizations, migrants, countries of origin and host. Our methodology is based on Principal Component Analysis and a Hierarchical Ascendant Classification to show a clear link between migration and trade, where distance is the main discriminating variable. We used a gravity model in cross section to show the positive effect of trade on international migration. The signs obtained for the two variables (exports and imports) indicate clearly a complementary relationship between migration and trade. We note also that the degrees of significance of these two variables are close. This seems to confirm that it is important that the bilateral trade relations are that migration is important.
Several models are presented in which factor mobility leads to an increase in the volume of world trade. The models share the common characteristic that the basis for trade is something other than differences in relative factor endowments. These alternative bases for trade include returns to scale, imperfect competition, production and factor taxes, and differences in production technology. Taken together, the models suggest a more general idea: the widely held notion that trade in goods and factors are substitutes is in fact a rather special result which is a general characteristic only of factor proportions models.
Gravity type models are widely used in international economics. In these models the inclusion of time-fi0xed regressors like geographical or cultural distance, language and institutional (dummy) variables is often of vital importance e.g. to analyse the impact of trade costs on internationalization activity. This paper assesses the problem of parameter inconsistency due to a correlation of the time-fixed regressors with the combined error term in panel data settings. A common solution is to use Instrumental-Variable (IV) estimation in the spirit of Hausman-Taylor (1981) since a standard Fixed Effect Model (FEM) estimation is not applicable. However, some potential shortcomings of the latter approach recently gave rise to the use of non-IV two-step estimators. Given their growing number of empirical applications, we aim to compare the performance of IV and non-IV approaches in the presence of time-fixed variables and right hand side endogeneity using Monte Carlo simulations, where we explicitly control for the problem of IV selection in the Hausman-Taylor case. The simulation results show that the Hausman-Taylor model with perfect-knowledge about the underlying data structure (instrument orthogonality) has on average the smallest bias. However, compared to the empirically relevant specification with imperfect-knowledge and instruments chosen by statistical criteria, simple non-IV rival estimators performs equally well or even better. We illustrate these findings by estimating gravity type models for German regional export activity within the EU. The results show that the HT specification is likely to overestimate the role of trade costs proxied by geographical distance.
This paper examines the effect of immigration on the US trade flows. The model hypothesizes that immigration facilitates international trade with home countries by lowering transaction costs. Immigrants also demand products from their country of origin and thus stimulate trade. Using a panel data set we estimate a dynamic semiparametric fixed-effect model. The immigrant stock, a proxy for transaction costs, enters the model non-parametrically, whereas other variables enter the model log-linearly, as implied by the gravity model of international trade. To estimate this semiparametric model, we develop a new instrumental variable estimator with desirable asymptotic properties. The results indicate that the immigration effect on imports is positive for both finished and intermediate goods, but the effect on exports is positive only for finished goods. The findings supports the hypothesis that for finished goods where country specific information is crucial for trading, immigrants have a pro trade effect for both US imports and US exports. This pro trade effect of the information and knowledge carried by the immigrants is not observed for the US exports in the intermediate goods. Immigrants also have a strong demand effect both for the consumer and intermediate imports.
Immigration and Trade: Evidence from the United Kingdom. — This paper investigates the link between immigration and trade
using recent UK data. Immigration from non-Commonwealth countries is shown to have a significant export-enhancing effect.
By contrast, immigration from Commonwealth countries is found to have no substantial impact on exports. We conjecture that
this could be because immigrants from the UK’s former colonies do not bring with them any new information that can help substantially
reduce the transaction cost of trade between their home countries and the host nation. The study also reveals a pro-imports
effect of immigration from the non-Commonwealth countries, whereas immigration from the Commonwealth appears to be reducing
imports, perhaps reflecting trade-substituting activities by immigrants.
In the standard Heckscher-Ohlin model, trade and migration are substitutes (that is, migration decreases with trade liberalization). The authors add four factors to the standard Heckscher-Ohlin model: labor skill levels (skilled or unskilled), international labor mobility, migration costs, and financing constraints. They examine two types of simulation. Case one applies to countries in the post-demographic transition stage, with a stable population. This includes countries of Eastern Europe and the former Soviet Union. Case two applies to countries with rapidly growing populations, such as Egypt, El Salvador, Mexico, and Morocco. In case one, trade liberalization raises emigration of the unskilled (and has no effect on emigration of the skilled), while greater protection raises emigration of the skilled (and has no effect on emigration of the unskilled). That is, any change in trade policy raises total emigration, but trade liberalization improves the average skill level of the labor force and increased protection lowers it. In case two, trade liberalization raises emigration of the unskilled and reduces emigration of the skilled. That is, the average skill level rises and thenet effect on total emigration is ambiguous. The opposite occurs with increased protection. In both cases, the average skill level of the population falls when protection increases in the presence of international migration, high migration costs, and financing constraints. Under the same circumstances, the skill level rises under trade liberalization.
Part of the rationale for the North American Free Trade Agreement was that it would increase trade and foreign direct investment ( fdi ) flows, creating jobs and reducing migration to the United States. Since poor data on illegal migration to the United States make direct measurement difficult, data on migration within Mexico, where census data permit careful analysis, are used instead to evaluate the mechanism behind predictions on migration to the United States. Specifications are provided 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 possible credit constraint effects are controlled for. Greater exposure to fdi and trade deters outmigration, with the effects working partly through the labor market. Finally, some tentative inferences are presented about the impact of increased fdi on Mexico--U.S. migration. On average, a doubling of fdi inflows leads to a 1.5--2 percent drop in migration. Copyright 2005, Oxford University Press.
This paper examines the structure and direction of developing Asia’s trade over the past two decades. The impacts on developing Asia of the economic slowdown in 2009–2010 in high-income countries of the Organization for Economic Cooperation and Development (OECD), which includes the European Union (EU), Japan, and United States (US) are projected through a computable general equilibrium model (CGE) of world trade and production. In addition, the impacts of fiscal stimulus and the rise of protectionist sentiments within developing Asia are examined. The expansion of intraregional trade in Asia reflects the role of the People’s Republic of China (PRC) as an assembly point and its reliance on demand from outside the region, the EU and the US in particular. The trade channel is crucial in transmitting economic distress from the OECD countries to developing Asia. The projection shows that developing Asia will continue to suffer from demand decline in OECD countries, with the PRC and India being the most impacted. Though Southeast Asia faces reduced exports to the OECD countries, its exports are reduced significantly to other Asian exporters, demonstrating the indirect trade linkages that now exist in the global economy. Fiscal stimulus from the largest economies (including PRC, EU, Japan, and US) could help boost trade and gross domestic product growth in developing Asia but it is not projected to offset entirely the negative impact from the global economic downturn. Protectionism has a negative impact on the countries and regions that take that course. Southeast Asia would be the most impacted by protectionism. If Southeast Asian countries were to raise their applied tariffs to the maximum most-favored nation bound rates under the World Trade Organization, the impact would be negative on real gross domestic product. Heavy manufactures followed by light manufactures, electronics, and textiles are most impacted.
By means of a descriptive survey of theoretical literature the paper first works out the potential determinants that may drive international migration from developing to developed countries. Furthermore, we look on the relationship between trade, development and migration. Empirical studies focusing on international migration from LDCs so far are very scarce. The paper utilizes a new dataset that is based on migration from 86 African and Asian countries to Germany. Information is available on overall moves (1981-1995) and asylum migration (1984-1995). The estimation results confirm the importance of the economic differential between countries for migration, the existence of an inverse u-shaped relationship between development and migration, as well as the importance of the political situation in sending countries and of network effects.
This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. We use panel data techniques within the framework of a standard gravity model of trade. Our sample includes an average of over 170 countries for the years 1981 to 2001. Previous studies of trade and migration have not dealt satisfactorily with problems of unobserved heterogeneity and selection bias. We address these problems using correlated random effects and selection models. Results suggest that larger migrant stocks are associated with higher trade flows
A model is constructed in which multinational firms may arise endogenously. Multinationals exist in equilibrium when transport and tariff costs are high, incomes are high, and firm-level scale economies are important relative to plant-level scale economies. Less obvious, multinationals are more important in total economic activity when countries are more similar in incomes, relative factor endowments, and technologies. The model may thus be useful in explaining several stylized facts, including (a) the growing importance of direct investment relative to trade among the developed countries over time and (b) the greater ratio of investment to trade among the developed countries relative to this ratio for 'north-south' or 'south-south' economic relationships. The model offers predictions about the volume of trade that contrast with those of the 'new trade theory', predicting that trade at first rises and then falls as countries converge in incomes, relative endowments, and technologies. Welfare is also considered, and it is shown that direct investment makes the smaller (or high cost) country better off, but may make the larger (or low cost) country worse off.
this paper are not necessarily shared by the Inter-American Development Bank.
Will a North American Free Trade Agreement (NAFTA) decrease Mexican migration to the United States, as the U.S. and Mexican governments assert, or increase migration beyond the movement that would otherwise occur, as NAFTA critics allege? This article argues that it is easy to overestimate the additional emigration from rural Mexico owing to NAFTA-related economic restructuring in Mexico. The available evidence suggests four major reasons why Mexican emigration may not increase massively, despite extensive restructuring and displacement from traditional agriculture. First, many rural dwellers in Mexico already have diversified their sources of income, making them less dependent on income earned from producing agricultural commodities like corn that will be most affected by NAFTA. Second, a free trade zone might induce more U.S. agricultural producers to expand in Mexico during the 1990s, creating additional jobs there instead of in the United States. Third, the links between internal migration in Mexico and emigration from Mexico are not as direct as is often assumed; even if economic restructuring increases internal population movements in Mexico, this may not translate into a great deal of international emigration. Finally, European experience teaches that free trade and economic integration can be phased-in in a manner which does not produce significant emigration, even under a freedom of movement regime. NAFTA-related economic displacement in Mexico may yield an initial wave of migration to test the U.S. labor market, but this migration should soon diminish if the jobs that these migrants seek shift to Mexico.
This article examines how data on INS border apprehensions are related to the flow of undocumented migrants crossing the southern U.S. border. Its centerpiece is a demographic model of the process of unauthorized migration across the Mexico-U.S. frontier. This model is both a conceptual framework that allows us to see theoretical linkages between apprehensions and illegal migrant flows, and a methodological device that yields estimates of the gross number of undocumented migrants. One implication of the model is that, for the first time, the relation between apprehensions and illegal flows can be examined empirically. We show that the ratio in each period between apprehensions and the undocumented flow is simply the odds of being located and arrested on any given attempt to enter the United States clandestinely. In addition, data for 1977–1988 suggest that the simple linear correlation between the number of apprehensions and the volume of illegal immigration is approximately 0.90 and that the size of the illegal migrant flow is roughly 2.2 times the number of Border Patrol arrests. The article concludes with a discussion of the conditions under which it is appropriate to use INS apprehensions data as an indicator for the flow of undocumented U.S. migrants.
In the short-to-medium run, a North American Free Trade Agreement (NAFTA) is likely to increase pressures for undocumented migration from Mexico to the United States. But given that NAFTA (if approved) will be phased-in over a 15-year period, the migration effect need not be sudden or overwhelming. In the long run, however, if free trade brings about an improvement in the Mexican economy relative to the US economy, the incentives for undocumented migration are likely to weaken. The authors calculate estimates of the undocumented gross annual migration flow by stipulating various degrees of changes in the relative level of unemployment and of wage rates between the United States and Mexico. These estimates show that narrowing the wide economic differentials between the two countries could substantially reduce the undocumented flow.
Whether trade and factor movements are substitutes or complements is a well re-searched topic on a theoretical level. Traditional trade theory suggests that both are substitutes. Modern trade theory and extensions of traditional models conclude that there is a complementary relationship. This paper studies trade and labour migration between Germany and its main source countries for foreign workforce, namely Spain, Portugal, Greece, Italy, and Turkey. The results indicate that there is a substitutional link between trade and foreign labour force. There is no significant impact of labor migration on trade but an increasing trade volume has significantly negative effects on labour migration.
At the end of the 20th century nearly all developed nations have become countries of immigration, absorbing growing numbers of immigrants not only from developed regions, byt increasingly from developing nations of the Third World. Although international migration has come to play a central role in the social, economic, and demographic dynamics of both immigrant-sending and immigrant-receiving countries, social scientist have been slow to construct a comprehensive theory to explain it. Efforts at theoretical explanation have been fragmented by disciplinary, geographic, and methodological boudaries. Worlds in Motion seeks to overcome these schisms to create a comprehensive theory of international migration for the next century. After explicating the various propositions and hypotheses of current theories, and identifying area of complementarity and conflict, the authors review empirical research emanting from each of the world's principal international migration systems: North America, Western Europe, the Gulf, Asia and the Pacific, and the Southern Cone of South America. Using data from the 1980s, levels and patterns of migration within each system are described to define their structure and organization. Specific studies are then comprehensively surveyed to evaluate the fundamental propositions of neoclassical economics, the new economics of labour migration, segmented labour market theory, world systems theory, social capital theory, and the theory of cumulative causation. The various theories are also tested by applying them to the relationship between international migration and economic development. Although certain theories seem to function more effectively in certain systems, all contain elements of truth supported by empirical research. The task of the theorist is thus to identify which theories are most effective in accounting for international migration in the world today, and what regional and national circumstances lead to a predominance of one theoretical mechanism over another. The book concludes by offering an empirically-grounded theoretical synthesis to serve as a guide for researchers and policy-makers in the 21st century.
El concepto de migración abarca una serie de fadores sobre lugar de origen y de destino, obstaculos intervinientes y caracteristicas
personales.
Este simple marco de trabajo es empleado con el fin de formular una serie de hipótesis acerca del volumen de la migración
bajo diversas condiciones, el desarrollo de corrientes y contracorrientes migratorias y las caracteristicas de los migrantes.
Siempre que ha sido posible, las hipótesis se presentan en forma tal que puedan comprobarse con datos anexos. Para otras hipótesis
los datos no son disponibles actualmente; otras pueden requerir reestructuración en términos de datos disponibles.
Las variaciones en el volumen de migración están relacionadas con la diversidad de las regiones y la población que la habita,
con el grado de dificultad de los obstáculos intervinientes y con las fiuctuaciones de la economía.
La relación entre corrientes y contracorrientes migratorias es analizada en base a la similaridad o discimilaridad de origen
y destino, al tipo de obstáculos intervinientes y a las condiciones economicas. La migración es considerada selectiva y el
grado de selectividad depende de un número de factores los cuales a menudo dan como resultado una selección bimodal.
In this paper, we examine the increase in relative wages for skilled workers in Mexico during the 1980s. Rising wage inequality in Mexico is linked to foreign capital inflows. We study the impact of foreign direct investment (FDI) on the skilled labor share of wages in Mexico over 1975–1988. We measure FDI using regional data on foreign assembly plants. Growth in FDI is positively correlated with the relative demand for skilled labor. In regions where FDI has concentrated, growth in FDI can account for over 50 percent of the increase in the skilled labor wage share that occurred in the late 1980s. © 1997 Elsevier Science B.V.
Incluye bibliografía e índice
The world economy nowadays experiences an unprecedented openness. The fading
of borders between independent economic systems - local, state, national and supernational
- allows capital, firms, and labor to move more freely around the globe, so as to better
exploit differences in opportunities (employment, savings, investments, etc.) arising from
ever-changing technological and economic environments, as well as in fiscal and monetary
stances.
Globalization is not an entirely new phenomenon. The world economy experienced
such a process about a century ago, until it was disrupted by the eruption of the first and
second world wars. Nevertheless, the current trend of economic integration is historically
unprecedented. We support Bordo, Eichengreen and Irwin (1999) who conclude that “our
world is different: Commercial and financial integration before World War I was more
limited.” A century ago, trade in goods was impeded by transport costs and imperfect
information. Also, services that were then considered largely nontradable, are now a growing
component of the volume of trade. Intra-industry trade, especially among multinationals,
is flourishing. Financial integration is deeper and broader than before, as financial flows
spread into more and more activities and sectors.
Immigrant employment often concentrates in non-traded goods sectors and many immigrants have low inter-sectoral mobility. We consider these observed characteristics of immigrant employment for the question of how immigration affects a nations pattern of production and trade. We model an economy producing three goods; one is non-traded. Domestic labor and capital are domestically mobile but internationally immobile. Some immigrant labor is specific to the non-traded sector. Our model indicates that the output and trade effects of immigration depend importantly on the sector and nature of immigrant employment. Empirical investigation of the models predictions indicates that trade and immigration are complements.
"Will a North American Free Trade Agreement (NAFTA) decrease Mexican migration to the United States, as the U.S. and Mexican governments assert, or increase migration beyond the movement that would otherwise occur, as NAFTA critics allege? This article argues that it is easy to overestimate the additional emigration from rural Mexico owing to NAFTA-related economic restructuring in Mexico. The available evidence suggests four major reasons why Mexican emigration may not increase massively, despite extensive restructuring and displacement from traditional agriculture....NAFTA-related economic displacement in Mexico may yield an initial wave of migration to test the U.S. labor market, but this migration should soon diminish if the jobs that these migrants seek shift to Mexico."
"This article examines how data on INS [Immigration and Naturalization Service] border apprehensions are related to the flow of undocumented migrants crossing the southern U.S. border. Its centerpiece is a demographic model of the process of unauthorized migration across the Mexico-U.S. frontier. This model is both a conceptual framework that allows us to see theoretical linkages between apprehensions and illegal migrant flows, and a methodological device that yields estimates of the gross number of undocumented migrants. One implication of the model is that, for the first time, the relation between apprehensions and illegal flows can be examined empirically. We show that the ratio in each period between apprehensions and the undocumented flow is simply the odds of being located and arrested on any given attempt to enter the United States clandestinely."
This paper examines how dollarization affects wages and employment in the Mexican labor market. Dollarization is modeled as a fixed real exchange rate and also as a potentially increased inflow of capital from abroad. The effects of dollarization depend upon whether adopting a fixed exchange reduces the rate of return on emigration and helps to attract foreign capital. The paper investigates how Mexican emigration to the United States responds to changes in bilateral economic conditions. The evidence indicates that the flow of illegal immigrants from Mexico into the United States is sensitive to economic conditions and is more volatile when the Mexican monetary authorities have fixed the exchange rate in the past. In contrast, the legal immigrant flow is not sensitive to changes in relative economic conditions.
In this paper, I selectively review recent literature on illegal migration from Mexico to the United States. I begin by discussing methods for estimating stocks and flows of illegal migrants. While there is uncertainty about the size of the unauthorized population, new data sources make it possible to examine the composition of legal and illegal populations and the time-series covariates of illegal labor flows. I then consider the supply of and demand for illegal migrants. Wage differentials between the United States and Mexico are hardly a new phenomenon, yet illegal migration from Mexico did not reach high levels until recently. An increase in the relative size of Mexico’s working-age population, greater volatility in U.S.–Mexico relative wages, and changes in U.S. immigration policies are all candidate explanations for increasing labor flows from Mexico. Finally, I consider policies that regulate the cross-border flow of illegal migrants. While U.S. laws mandate that authorities prevent illegal entry and punish firms that hire unauthorized immigrants, these laws are imperfectly enforced. Lax enforcement may reflect political pressure by employers and other interests that favor open borders.
We examine illegal immigration in the United States from Mexico over the period 1976-1995. One challenge is that we do not observe the number of individuals that attempt to enter the United States illegally; we only observe the number of individuals apprehended attempting to cross the U.S.-Mexico border illegally. Based on a simple migration model, we postulate the existence of an apprehensions function, which expresses apprehensions at the border as a function of illegal attempts to cross the border and U.S. border-enforcement effort. We estimate a reduced-form apprehensions function using monthly data on apprehensions at the U.S.-Mexico border, person hours the U.S. Border Patrol spends policing the border, and wages in the United States and Mexico. We find that a 10% decrease in the Mexican real wage leads to a 7.5% to 8.8% increase in apprehensions at the border. Under plausible conditions this is a lower bound for the effect of the Mexican wage on attempted illegal immigration. It is the purchasing power of U.S. wages in Mexico, not the purchasing power of U.S. wages in the United States, that matters for border apprehensions, suggesting that migrants expect to maintain ties with Mexico. Border apprehensions are higher in the month following a large devaluation of the peso and higher when the change in the Mexican real wage is negative. Each additional hour the U.S. Border Patrol spends policing the border yields an additional 0.25 to 0.33 apprehensions.
This paper describes a simple method of calculating a heteroskedasticity and autocorrelation consistent covariance matrix that is positive semi-definite by construction. It also establishes consistency of the estimated covariance matrix under fairly general conditions.
Trade theorists have come to understand that their theory is ambiguous on the question: are trade and factor flows substitutes? While this sounds like an open invitation for empirical research, hardly any serious econometric work has appeared in the literature. This paper uses history to fill the gap. It treats the experience of the Atlantic economy between 1870 and 1940 as panel data with almost 700 observations. When shorter run business cycles and ‘long swings’ are extracted from the panel data, substitutability is soundly rejected. When secular relationships are extracted over longer time periods and across trading partners, once again substitutability is soundly rejected. Finally, the paper explores immigration policy and finds that policy-makers never behaved as if they viewed trade and immigration as substitutes.
Undocumented migration to the United States: IRCA and the experience of the Post-IRCA changes in the volume and composition of undocumented migration in the United States: An assessment based on apprehensions data Undocumented migration to the United States: IRCA and the experience of the
- Bean
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Political economy of trade policy: Essays in honor of Jagdish Bhagwati
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Feenstra, Robert C., Gene M. Grossman and Douglas A. Irwin (1995), Political economy of trade policy: Essays in honor of Jagdish Bhagwati, Cambridge, MA, MIT Press.
Trade and migration: An introduction Migration: The controversies and the evidence
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- Zimmermann
Faini, Riccardo, Jaime De Melo and Klaus F. Zimmermann (1999), Trade and migration: An introduction, in: R. Faini et al., eds., Migration: The controversies and the evidence, Cambridge, Cambridge University Press.
Trade liberalisation and migration flows: Some evidence from developing countries
- Anne Richards
Post-IRCA changes in the volume and composition of undocumented migration in the United States: An assessment based on apprehensions data
- Frank D Bean
- J Thomas
- Michael J Espenshade
- Robert F White
- Dymowski
The economic logic of illegal immigration, Council Special Report 26, Council on Foreign Relations
- Gordon H Hanson
Development strategy, employment and migration: Country experiences
- Philip L Martin
Der Zusammenhang zwischen Freihandel und Migration am Beispiel Mexikos: eine theoretische und empirische Analyse
- Río Melchor Del