The International Transmission of Local Economic Shocks Through Migrant Networks

María Esther Caballero, Brian Cadena and Brian Kovak

No 28696, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using newly validated data on geographic migration networks, we study how labor demand shocks in the United States propagate across the border with Mexico. We show that the large exogenous decline in US employment brought about by the Great Recession affected demographic and economic outcomes in Mexican communities that were highly connected to the most affected markets in the US. In the Mexican locations with strong initial ties to the hardest hit US migrant destinations, return migration increased, emigration decreased, and remittance receipt declined. These changes significantly increased local employment and hours worked, but wages were unaffected. Investment in durable goods and children's education also slowed in these communities. These findings document the effects in Mexico when potential migrants lose access to a strong US labor market, providing insight regarding the potential impacts of stricter US migration restrictions.

JEL-codes: F22 J21 J23 J61 R23 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-int, nep-lab, nep-mig, nep-net and nep-ure
Note: DEV ITI LS
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Citations: View citations in EconPapers (11)

Published as María Esther Caballero & Brian C. Cadena & Brian K. Kovak, 2023. "The international transmission of local economic shocks through migrant networks," Journal of International Economics, .

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Journal Article: The international transmission of local economic shocks through migrant networks (2023)
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