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Liberalization and Incentives for Labor Migration: Theory with Applications to NAFTA

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  • James R. Markusen
  • Stephen Zahniser

Abstract

One of the motivations for NAFTA from the US point of view was to reduce the" incentives for Mexican migration into the US. Unskilled rural males are a primary source of" illegal immigration and also Mexico's relatively abundant factor. This group should therefore" be made better off by trade and investment liberalization according to the traditional" Heckscher-Ohlin model. Existing evidence, along with best guesses of many experts in the" area, suggest that NAFTA is unlikely to have a significant positive impact on this group least not within the time frame of several decades. We draw on a number of recent theoretical" contributions in order to offer reasons why NAFTA may not raise the wages of unskilled" Mexican workers.

Suggested Citation

  • James R. Markusen & Stephen Zahniser, 1997. "Liberalization and Incentives for Labor Migration: Theory with Applications to NAFTA," NBER Working Papers 6232, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6232
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    References listed on IDEAS

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    1. J. Peter Neary, 1995. "Factor Mobility and International Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 4-23, November.
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    Cited by:

    1. Chiquiar, Daniel & Covarrubias, Enrique & Salcedo, Alejandrina, 2016. "Labor market consequences of trade openness and competition in foreign markets," Conference papers 332760, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Hélène Ehrhart & Maëlan Le Goff & Emmanuel Rocher & Raju Jan Singh, 2012. "Does Migration Foster Exports? An African Perspective," Working Papers 2012-38, CEPII research center.
    3. Mark G. Guzman & Joseph H. Haslag & Pia M. Orrenius, 2002. "Coyote crossings: the role of smugglers in illegal immigration and border enforcement," Working Papers 0201, Federal Reserve Bank of Dallas.
    4. Aghion, Edouard, 2011. "NAFTA and its Impact on Mexico," MPRA Paper 36529, University Library of Munich, Germany.
    5. Saibal Kar & Basudeb Guha-Khasnobis, 2006. "Foreign Capital, Skill Formation, and Migration of Skilled Workers," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(2), pages 107-123.
    6. Holzmann, Robert & Munz, Rainer, 2004. "Challenges and opportunities of international migration for the EU, its member states, neighboring countries, and regions : a Policy Note," Social Protection Discussion Papers and Notes 30160, The World Bank.
    7. Aroca Gonzalez, Patricio & Maloney, William F., 2005. "Migration, trade, and foreign investment in Mexico," Policy Research Working Paper Series 3601, The World Bank.
    8. Mark Guzman & Joseph Haslag & Pia Orrenius, 2008. "On the determinants of optimal border enforcement," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(2), pages 261-296, February.
    9. William Maloney & Patricio Aroca, 2004. "Migration, Trade and FDI in Mexico," Econometric Society 2004 Latin American Meetings 329, Econometric Society.
    10. Riccardo Faini, 2002. "Développement, commerce international et migrations," Revue d’économie du développement, De Boeck Université, vol. 10(1), pages 85-116.
    11. Istvan Konya, 2001. "Optimal Immigration, Assimilation and Trade," Boston College Working Papers in Economics 507, Boston College Department of Economics.
    12. Chiquiar, Daniel, 2008. "Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico," Journal of International Economics, Elsevier, vol. 74(1), pages 70-93, January.
    13. Ehrhart, Helene & Le Goff, Maelan & Rocher?, Emmanuel & Singh, Raju Jan, 2014. "Does migration foster exports ? evidence from Africa," Policy Research Working Paper Series 6739, The World Bank.
    14. Mendoza, Jorge Eduardo, 2006. "Determinantes macroeconómicos regionales de la migración mexicana [Regional macroeconomic determinants of Mexican migration]," MPRA Paper 2860, University Library of Munich, Germany, revised 2006.
    15. repec:awi:wpaper:0429 is not listed on IDEAS
    16. István Kónya, 2007. "Optimal Immigration and Cultural Assimilation," Journal of Labor Economics, University of Chicago Press, vol. 25(2), pages 367-391.
    17. Benjamin Aleman-Castilla, 2007. "The Returns to Temporary Migration to the United States: Evidence from the Mexican Urban Employment Survey," CEP Discussion Papers dp0804, Centre for Economic Performance, LSE.
    18. Chiquiar, Daniel, 2005. "Why Mexico's regional income convergence broke down," Journal of Development Economics, Elsevier, vol. 77(1), pages 257-275, June.
    19. Aleman-Castilla, Benjamin, 2007. "The returns to temporary migration to the United States: evidence from the Mexican urban employment survey," LSE Research Online Documents on Economics 19706, London School of Economics and Political Science, LSE Library.
    20. Astrup Claus & Dessus Sebastien, 2005. "Exporting Goods or Exporting Labor?: Long-term Implications for the Palestinian Economy," Review of Middle East Economics and Finance, De Gruyter, vol. 3(1), pages 38-60, April.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F15 - International Economics - - Trade - - - Economic Integration

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