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Title: Migration and Development in Mexican Communities

Citation Type: Dissertation/Thesis

Publication Year: 2008

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Abstract: This thesis examines the relationship between migration and economic development in Mexico. Chapter 1 examines the effects shocks to destination labor markets on economic development at home and the welfare of those left behind. Higher demand for labor in destination countries advances development by increasing remittance flows, but it may have adverse effects on non-migrants if their skills complement migrants' skills. Using an empirical strategy that exploits stickiness in migrants' preferred U.S. destinations, I find that all members of Mexican communities benefit from improved labor market conditions and business opportunities when high U.S. demand induces migrants to leave. This effect seems to be driven by higher demand for locally-produced goods and services more than relaxed credit constraints. Chapter 2 investigates the effects of manufacturing sector development at home on the migration choices of young Mexican men. Development at home decreases the net benefit to outmigrtion but may help to relax credit constraints and finance upfront migration costs. If the latter effect is strong, growth in the manufacturing sector can actually increase outmigration rates. Using an instrumental variables strategy based on local industrial composition, however, I find that local industrial development substantially curbs migration to the United States even in the poorest areas. Indeed, these estimates imply that the slowdown in manufacturing growth between the late 1990's and the early 2000's induced an additional 4.5% of young Mexican men to leave the country. Chapter 3 extends the theoretical study of optimal relational contracts and ownership structures to a general equilibrium model with random matching, focusing particularly on the role played by the relative sizes of the two sides of the market (market structure). Along with my coauthors, I find that market structure can affect the sustainability of efficient relational contracts; in the most interesting case, relational contracts become harder to sustain as the two sides of market become unbalanced. Since migration has direct effects on market structure, this chapter highlights a novel channel through which it can influence economic efficiency in source and destination countries. Acknowledgments I would like to thanks my advisors, Abhijit Banerjee and David Aut

Url: https://dspace.mit.edu/bitstream/handle/1721.1/45929/320779058-MIT.pdf?sequence=2

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Authors: Schnabl, Peter A.

Institution: MIT

Department: Economics

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Data Collections: IPUMS USA

Topics: Migration and Immigration

Countries: United States