Migration and development in Mexican communities

Migration from Mexico to the United States constitutes one of the world's largest labor flows and generates enormous capital flows in the opposite direction. Corresponding to each of these flows is a distinct view of the role migration plays in local economic development. The optimistic view stresses the role of remittances in stimulating demand and relaxing credit constraints, while the pessimistic view emphasizes the departure of the economy's skilled and motivated workers. Using data from the Mexican Migration Project and exploiting stickiness in migrants' choice of U.S. destination, I examine the effects of migrant demand shocks on business ownership and job choice in Mexican communities. I find little evidence to support the pessimistic scenario. All members of the community, including non-migrants, appear to benefit from improved labor market and business investment opportunities when high U.S. demand induces migrants to leave. Demand for local products rather than credit supply effects seems to be responsible for this outcome. 1 Introduction Since the 1980's, Mexican workers have experienced a rapid expansion in access to the U.S. labor market. By the year 2000, 9.4% of Mexico's total population was living in the United States (Chiquiar & Hanson, 2005), forming one of the world's largest labor flows. Revealed preference suggests we can assume that this migration is beneficial for the migrants themselves; however, its effects on those who remain in Mexico are ambiguous.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2008

Author dc:creator

• Schnabl, Peter A. (Peter Andrew)

Advisor dc:contributor.advisor

• Abhijit Banerjee and David Autor.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/45929

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/45929