15 Jul 19

Mexican Migration to the United States: Selection, Assignment, and Welfare.

Authors: BURZYNSKI Michal, GOLA Pawel.

Abstract: This paper quanti fies the effects of Mexican migration to the United States on individual welfare along the continuous distribution of skills in both countries. We develop a model that focuses on the sorting of workers within and across national labor markets. Mexican workers self-select into migration, and then, within each country, all workers match with productivity-differentiated fi rms. Firms operate in monopolistically competitive international markets, which they can freely enter or exit. These features of the model ensure that workers with similar skills are substitutes and dissimilar workers are complements. Thus, migration redistributes welfare in the source and host country. In particular, the observed Mexican immigration to the United States depresses the wages of below-median local workers. However, the welfare losses in the United States are modest in scope: A $1.70 per day lump-sum tax on Mexican immigrants is sufficient to fi nance a compensating transfer for all U.S. citizens.

Reference: BURZYNSKI Michal , GOLA Pawel. Mexican Migration to the United States: Selection, Assignment, and Welfare. LISER, 2019, Working Papers n°2019-10, 80 p.


JEL: C68, C78, F22, J24.

Project: The Economic Effects of International Migration and Skill Selection

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