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Research ArticleArticles

Migration Experience and Earnings in the Mexican Labor Market

Steffen Reinhold and Kevin Thom
Journal of Human Resources, July 2013, 48 (3) 768-820; DOI: https://doi.org/10.3368/jhr.48.3.768
Steffen Reinhold
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Kevin Thom
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Abstract

We present a theoretical and empirical analysis of the relationship between U.S. migration experience and earnings in the Mexican labor market. We use our model to analyze the effects of self-selection and endogeneity on OLS estimates of the return to migration experience in the Mexican labor market. Under plausible assumptions, OLS estimates provide a lower bound on the true average return to migration experience among return migrants. Using Mexican Migration Project (MMP) data, we find a return to migration experience of about 2.2 percent per year. Our estimates are robust to the inclusion of proxies for unobserved skill. A comparison with patterns in the 1995 Mexican Population and Dwelling Count suggests that our results are robust across data sets and are driven by a relationship between migration experience and wages, not hours worked. We also explore the plausibility of multiple mechanisms that could explain this relationship. We find the most evidence for the theory that individuals are acquiring occupation-specific work experience in the United States. The return to a year of occupation-specific migration experience is estimated to be as high as 8.7 percent for some occupations.

  • Received August 2011.
  • Accepted September 2012.
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Journal of Human Resources: 48 (3)
Journal of Human Resources
Vol. 48, Issue 3
1 Jul 2013
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Migration Experience and Earnings in the Mexican Labor Market
Steffen Reinhold, Kevin Thom
Journal of Human Resources Jul 2013, 48 (3) 768-820; DOI: 10.3368/jhr.48.3.768

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Migration Experience and Earnings in the Mexican Labor Market
Steffen Reinhold, Kevin Thom
Journal of Human Resources Jul 2013, 48 (3) 768-820; DOI: 10.3368/jhr.48.3.768
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  • Article
    • Abstract
    • I. Introduction
    • II. Literature on Return Migration and Skill Upgrading
    • III. A Simple Model of Temporary Migration
    • IV. Implications for Relationships in the Data
    • V. Data and Descriptive Statistics
    • VI. Empirical Results
    • Appendix A1 Deriving Theoretical Results
    • Appendix A2 Interpreting the OLS Estimates
    • Appendix A3 Data
    • Appendix A4 Additional Descriptive Statistics
    • Appendix A5 Robustness Exercises
    • Footnotes
    • References
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