A Revision of the Self-selection of Migrants Using Returning Migrants' Earnings

Aitor Lacuesta ()

Annals of Economics and Statistics, 2010, issue 97-98, 235-259

Abstract: This paper examines the self-selection of recent Mexican migrants who reside in the United States. Unlike previous studies, I use the distribution of wages in Mexico of those migrants who returned home after being abroad for some time, given age and education. Considering wages of returning migrants as opposed to wages of non-migrants, as in CHIQUIAR and HANSON [2005], and applying them to the characteristics of emigrants still residing in the United States, I take into account the selection of migrants in observed characteristics and the selection in terms of unobserved ability affecting their productivity. To test whether returning migrants' wages contain any useful information, I follow two steps. First, I bring to the data some testable implications of BORJAS and BRATSBERG's [1996] model. The model shows that, regardless of the reason for returning, the distribution of characteristics of returning migrants is in between the distribution of non-returning migrants and that of non-migrants. Second, I show that returning migrants' wages reflect their pre-emigration productivity and that they are not affected by possible human-capital gains derived from the decision to emigrate. Taking all this evidence into account, I use returning migrants' wages in Mexico upon return to estimate the wage in Mexico of migrants who are still in the United States with the same observed characteristics. I show that considering this information does not change the empirical result of middle selection of emigrants in the origin country obtained in CHIQUIAR and HANSON [2005]. If anything, unobserved abilities increase the average wage of the counterfactual distribution and might decrease its dispersion

Date: 2010
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