Guest Worker Programs and Human Capital Investment

Abstract

Guest worker programs are often criticized for worker maltreatment. Income earned could, however, benefit migrants. I examine the impact of the Bracero Program, a guest worker program between Mexico and the United States in the mid-20th century, on human capital investments. I use proximity to recruitment centers as an instrument for migration. The opening and closing of centers, due to changes in international bargaining power, provides exogenous variation. Estimates show that bracero migration caused increases in primary school enrollments, the provision of primary schools, and spending on education by state governments.