The immigration of educated mexicans: The role of informal social insurance and migration costs’, mimeo: Instituto Tecnológico Autónomo de México

Recent evidence suggests that Mexicans immigrating to the US are drawn from the top or medium part of the education distribution. This finding contradicts the standard migration model which predicts that, because Mexico has more wage inequality and higher returns to education, low-skill and low-education workers are more likely to migrate. This investigation develops and estimates a model with three potential explanations: decreasing migration costs in education, different relations between education and employment in the two countries, and differential availability of informal social insurance. The results reveal that migration costs can not explain the reversal in selection. The research also finds that increases in the employment probability of the US and decreases in Mexico raise the migration probability, especially for the more educated. However, the greater migration of high education workers is driven primarily by the fact that low-education workers suffer a much greater loss of informal social insurance when they migrate to the US