International Import Competition and the Decision to Migrate: Evidence from Mexico

45 Pages Posted: 25 Feb 2018

See all articles by Kaveh Majlesi

Kaveh Majlesi

Lund University; Research Institute of Industrial Economics (IFN); IZA Institute of Labor Economics

Gaia Narciso

Trinity College Dublin

Abstract

We analyze the effects of the increase in China's import competition on Mexican domestic and international migration. We exploit the variation in exposure to competition from China, following its accession to the WTO in 2001, across Mexican municipalities and estimate the effect of international competition on the individual decision to migrate. Controlling for individual and municipality features, we find that individuals living in municipalities more exposed to Chinese import competition are more likely to migrate to other municipalities within Mexico, while a negative effect is found on the decision to migrate to the US. In particular, we find that Chinese import competition reduces migrants' negative self-selection: the rising international competition lowers the likelihood of low-educated, low-income people to migrate to the US, by making them more financially constrained. We do not find any evidence that changes in demand for Mexican workers in the US drive our results.

Keywords: import competition, domestic migration, international migration, negative self-selection

JEL Classification: F14, F16, F22, O15, R23

Suggested Citation

Majlesi, Kaveh and Narciso, Gaia, International Import Competition and the Decision to Migrate: Evidence from Mexico. IZA Discussion Paper No. 11346, Available at SSRN: https://ssrn.com/abstract=3129290

Kaveh Majlesi (Contact Author)

Lund University ( email )

Box 117
Lund, SC Skane S221 00
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Gaia Narciso

Trinity College Dublin ( email )

Dublin
Ireland

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