Mexican Migration to the United States: Underlying Economic Factors and Possible Scenarios for Future Flows

The recent history of Mexican migration to the United States is one marked by high flows during the 1990s that reached a peak in 2000 and then dropped, plummeting sharply with softening of the US construction sector in 2007 and onset of the recession the following year.

What will migration from Mexico to the United States look like over the next several years? In a new report for the Migration Policy Institute (MPI), Mexican Migration to the United States: Underlying Economic Factors and Possible Scenarios for Future Flows, two economists examine economic factors that have influenced contemporary flows and construct scenarios on how such flows could evolve over the next several years.Based on their model of US demand for Mexican labor and assumptions regarding economic and wage growth, Bank of Mexico economists Daniel Chiquiar and Alejandrina Salcedo offer a baseline scenario for future migration flows as well as alternative scenarios. The report also suggests that the composition of the flows may change, bringing in new inflows of skilled Mexican workers.

The baseline scenario in the report — which assumes overall US economic growth of 2.5 percent, prerecession growth rates in wages, and a lower supply of Mexican labor due to strong economic performance in Mexico — suggests that net inflows from Mexico to the United States through 2017 could be on the order of 260,000 yearly. This figure — which includes legal and unauthorized migrants, workers of all skill levels, and those not in the labor force — is similar to the net inflow of 280,000 Mexicans per year during 2000-07, but is significantly lower than the net inflows recorded during 1990-2000, which amounted to around 466,000 annually.

The report constructs alternative scenarios that vary the expected growth rate of the construction sector, which can be particularly important in determining Mexican migration. Through changes in relative wages, the authors also simulate the effects of a positive labor supply shock (i.e. one that spurs migration such as Mexico’s 1994-95 economic crisis) and of a negative labor supply shock (such as increased border enforcement after 9/11). These alternative scenarios, which do not take into account legislative proposals currently under debate in the United States, suggest that annual net migration inflows from Mexico could potentially range from 230,000 to as much as 330,000.

The report was prepared for the Regional Migration Study Group, convened by MPI and the Wilson Center’s Latin American Program/Mexico Institute. The Study Group, co-chaired by former Mexican President Ernesto Zedillo, former US Secretary of Commerce Carlos Gutierrez, and former Guatemalan Vice President Eduardo Stein, will issue a final report on April 26 with important recommendations for the United States, Mexico, and the Northern Triangle of Central America (El Salvador, Guatemala and Honduras) regarding migration and human-capital development.

More than any issue, migration shapes and defines the US relationship with Mexico and, increasingly, much of Central America. Thus, getting migration and the issues that fuel and surround it right is vital to the region’s long-term stability, prosperity and competitiveness in a fast-changing and unforgiving global economy that increasingly is organizing around regional relationships.

KJ