The Effect of the Trade Balance on the Decision to Migrate from Mexico to the United States
The decision to migrate from Mexico to the United States is based upon many different factors. Personal characteristics such as age, education, skills or family background factor into the decision making process. It is also based on the social networks available to the migrant in the United States; access to physical capital; community level variables; U.S border enforcement policy; macroeconomic indicators such as foreign direct investment, real interest rate, inflation, and national wage differences. However, the influence of the trade balance has not been examined yet. Using the Mexico Migration Project (MMP) dataset, I plan on analyzing the changes in Mexican exports and U.S imports into Mexico on the decision to migrate. Economic and social theory state contrasting theories on whether the relationship will be positive or negative. This paper aims to discover a relationship by extending previous models of migration with variables for exports and imports. The results show that documented migration to the United States from Mexico decreases as Mexican exports rise and increases as imports from the United States into Mexico increase. However, the same results can not be concluded about undocumented migration with statistical confidence. The results suggest that if the United States adopts protectionist trade policies then migration to the country might occur as an unintended consequence.
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