Wages Differences between Temporary and Permanent Immigrants

Abstract

Temporary “guestworker” programs are often assumed to have less impact on native-born workers than permanent immigration. However, there are theoretical reasons to expect temporary immigrants to accept lower wages and thus for temporary migration to have a greater adverse impact on receiving country wages. This article develops these theoretical insights and tests for differences in wages paid to temporary and permanent undocumented Mexican immigrants. Survey data from Mexico shows that temporary immigrants earned wages about 12% lower than permanent immigrants. Controlling for human and social capital, a 7.4% difference in wages remains. Among married immigrants, temporary immigrants earn 9.6% lower wages with these same controls.