Migration, Trade and FDI in Mexico

William F. Maloney () and Patricio Aroca ()

No 329, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: Part of the rationale for NAFTA was that it would increase trade and FDI flows, creating jobs and reducing migration to the US. Since poor data on illegal flows to the US makes direct measurement difficult, this paper instead evaluates the mechanism behind these predictions using data on migration within Mexico where the census data permit careful analysis. We offer the first specifications 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 we attempt to control for substitutions vs. credit constraint effects. FDI and trade variables deter migration and appear to work through the labor market. Finally, we generate some tentative inferences about the impact on Mexico-US migration and find it to be of important magnitude.

Keywords: Migration; Labor Market adjustment (search for similar items in EconPapers)
JEL-codes: J61 O15 O18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn
Date: 2004-08-11
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Persistent link: http://EconPapers.repec.org/RePEc:ecm:latm04:329

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