U.S. Immigration Enforcement and Mexican Labor Markets


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Title: U.S. Immigration Enforcement and Mexican Labor Markets

Speaker: Thomas Pearson (Syracuse University)

Abstract: Decades of emigration to the United States have brought economic benefits to migrant-sending regions across Mexico while increasing their exposure to shocks across the border. In this paper, I study how increased U.S. deportations affect Mexican labor markets using variation in migrant networks and Secure Communities (SC), a policy which expanded local immigration enforcement. I show that in the short run, deportations increase return migration and decrease monthly earnings for local Mexicans with less than a high school degree. Deportations also increase net outflows within Mexico and emigration to the U.S., a potential mechanism for why earnings mostly rebound after five years. The negative short run effects are not driven by falls in remittance income or increases in crime as deportations increase both the share of households receiving remittances and the total amount received, and they do not affect homicide rates. The results instead point to increased labor market competition as a result of return migration. Lastly, I show that the negative short run effects of this labor supply shock are larger in localities with worse infrastructure and less access to the financial sector. These results help explain the large negative effects on earnings as many migrants return to less developed regions where these frictions are prevalent.

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