International job search: Mexicans in and out of the US

摘要

It is argued that migration from Mexico to the US and return migration are determined by international wage differentials and preferences for origin. We use a model of job search, savings and migration to show that job turnover is a crucial determinant of the migration process. We estimate this model by Simulated Method of Moments (SMM) and find that migration practically disappears, it goes down from 19 to 0.5%, had Mexico US arrival rates while employed. A lower decrease in migration, to 7%, occurs by an increase in Mexican wage offers. On the other hand, doubling migration costs reduces migration rates from 19 to 5%, while subsidizing return migration in $300 reduces migration rates only to 14%.