The effect of NAFTA on internal migration in Mexico: a regional economic analysis

Mary Arends-Kuenning, Kathy Baylis, Rafael Garduño-Rivera

Research output: Contribution to journalArticle

Abstract

Trade facilitates growth in some regions of a country while shrinking others, and therefore to benefit from trade, labour may need to be able to migrate. This mobility is particularly crucial in a developing country with high income inequality like Mexico. We seek to answer the following questions: What characteristics facilitate or hinder that internal migration? Has trade liberalization changed the pattern of internal migration in Mexico? We first predict regional economic growth resulting from changes in Mexico-US tariffs by sector. We find that trade liberalization appears to have largely benefited the manufacturing sector. Next, using a spatial gravity model of migration, we find that while economic growth from trade openness drew workers to urban regions in the northern Border States of Mexico, much of the trade-driven migration occurred before NAFTA. Second, contrary to popular belief, migration from largely rural states appears to have decreased since NAFTA. We also find evidence that migration to the United States increased after NAFTA. Last, we find that income disparity in both the destination and origin region deters migration and that this effect increases after NAFTA. Thus, we see evidence that within-region income disparity can hinder migration, potentially exacerbating income disparity among regions.

Original languageEnglish (US)
Pages (from-to)1052-1068
Number of pages17
JournalApplied Economics
Volume51
Issue number10
DOIs
StatePublished - Feb 25 2019

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Keywords

  • Mexico
  • Regional History
  • Regional migration
  • economic development
  • trade

ASJC Scopus subject areas

  • Economics and Econometrics

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