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The World Bank Economic Review Advance Access originally published online on December 14, 2005
The World Bank Economic Review 2005 19(3):449-472; doi:10.1093/wber/lhi017
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© The Author 2005. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org.

Migration, Trade, and Foreign Direct Investment in Mexico

Patricio Aroca

Patricio Aroca is a professor and director of the Institute for Applied Regional Economy (IDEAR), at the Universidad Católica del Norte, Antofagasta, Chile; his email address is paroca{at}ucn.cl.

William F. Maloney

William F. Maloney is lead economist in the Office of the Chief Economist for Latin America at the World Bank; his email address is wmaloney{at}worldbank.org.

Part of the rationale for the North American Free Trade Agreement was that it would increase trade and foreign direct investment (FDI) flows, creating jobs and reducing migration to the United States. Since poor data on illegal migration to the United States make direct measurement difficult, data on migration within Mexico, where census data permit careful analysis, are used instead to evaluate the mechanism behind predictions on migration to the United States. Specifications are provided for migration within Mexico, incorporating measures of cost of living, amenities, and networks. Contrary to much of the literature, labor market variables enter very significantly and as predicted once possible credit constraint effects are controlled for. Greater exposure to FDI and trade deters outmigration, with the effects working partly through the labor market. Finally, some tentative inferences are presented about the impact of increased FDI on Mexico–U.S. migration. On average, a doubling of FDI inflows leads to a 1.5–2 percent drop in migration.


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Home page
 International SociologyHome page
M. R. Sanderson and J. Kentor
Foreign Direct Investment and International Migration: A Cross-National Analysis of Less-Developed Countries, 1985--2000
International Sociology, July 1, 2008; 23(4): 514 - 539.
[Abstract] [PDF]


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