What happens to developing countries with large numbers of emigrants? While debates about migration typically center on receiving countries’ labor markets, less discussion is focused on the effects on labor markets, education, and family life in sending countries. This column reports on the experience of Mexico, where a large share of working age men has gone to work abroad in recent decades. This can lead to delays in marriage, women never marrying and/or having fewer children, which in turn could lead to them extending their time in school and university, and going into the labor market. The policy implications in areas such as education funding and labor market programs are significant.
Most research on the effects of migration focuses on labor markets in the receiving countries, for example whether immigration has an effect on the wages and employment of native workers (a debate summarized by Michael Clemens). Less attention has been paid to the effects on labor markets in the sending countries.
In our research, we examine the effects of migration on labor markets in Mexico. According to the World Bank, Mexico is one of the largest sending countries in the world and the Mexico-United States is the top migration corridor. One result is that for many families in Mexico, remittances are an important source of income. Changes in remittances, return migration and outmigration are likely to have significant effects on Mexico and its labor market and economy.
There has been a long history of migration flows from Mexico to the United States. But there have been shifts across areas and over time due to changes in the demand for Mexican-born labor and policies implemented by the United States that attract or discourage immigrants—for example, the degree of strictness on temporary work visas or border enforcement. We make use of these changes in migration flows to identify the impacts of migration on the sending country.
Who are these migrants?
Historically, Mexican migrants tend to be men of working age with an average level of schooling. This means that, on average, they have a middle school or some high school education. The college-educated are less likely to migrate because they enjoy higher potential returns in Mexico, while the very poor do not typically migrate since they do not often have the resources to pay for the journey.
What happens to a country when their ‘eligible bachelors’ leave?
Our research explores the effects of the sex imbalance that results from migration on women’s labor market outcomes. In places where this sex imbalance is greater, and hence there is more migration, women are more likely to work, have better jobs, and earn more.
What happens when migration trends change course?
Starting in the middle of the 2000s, migration flows from Mexico to the United States experienced a dramatic and unprecedented decline. One of the main drivers of this was the Great Recession, which began in late 2007 and entailed decreased US demand for Mexican-born labor.
We explore the effects of these changes on labor markets in Mexico, exploiting the differential manifestation of the Great Recession across industries and states in the United States to identify impacts. We focus on differences by sex and education, as the effects on employment, job type, and wages are unlikely to be universal.
In the short run, labor markets in Mexico cannot absorb all of those people who want to migrate to the United States but do not. Both the probability of employment and labor force participation fall for less well-educated men. Informal markets absorb some of the shock, but these informal jobs take the form of salaried work rather than self-employment.
Meanwhile, women increase their labor force participation and employment, and move into formal jobs. The different response compared with men may come from the need to make up for lost income as a result of men working less or sending fewer remittances.
Overall, our research indicates that migration affects the labor market, education, marriage, and fertility outcomes in the sending country. Delays in marriage, women never marrying and/or having fewer children could all be the result of a large number of men leaving for another country to work. This in turn could lead to women extending their time in schooling and university, and going into the labor market.
These effects can be non-trivial. This could affect policy decisions on a broad set of dimensions in the sending country—for example, in the area of education funding or labor market programs for the unemployed or self-employed.