Emigration and wages in source countries: Evidence from Mexico

Abstract

This paper examines empirically the effect of Mexican emigration to the United States on wages in Mexico using data from the Mexican and US censuses from 1970 to 2000. The main result in the paper is that emigration has a strong and positive effect on Mexican wages. There is also evidence for increasing wage inequality in Mexico due to emigration. Simple welfare calculations based on a labor demand–supply framework suggest that the aggregate welfare loss to Mexico due to emigration is small. However, there is a significant distributional impact between labor and other factors.