Migration and U.S. Labor Market Effects of the Mexican Drug War

• In Event: Migration and Peer Effects

Abstract

We estimate the effect of the Mexican drug war on Mexico-to-U.S. migration and the resulting effects on population, employment and wages in U.S. labor markets. Our empirical strategy compares U.S. counties connected by the preexisting migration network to drug violence driven by close elections in Mexican municipalities in 2007 and 2008. Over the following decade, migrants fleeing the violence---the vast majority of whom are undocumented---cause native-born U.S. workers' employment rates to increase and unemployment rates to fall, while wages do not change. Our estimate implies that 0.86 native jobs are created for the arrival of 1 likely undocumented Mexican. Employment gains are driven by less-educated natives. Business starts increase, suggesting higher profits for local firms.

Author

• Yuci Chen, W. E. Upjohn Institute for Employment Research
  Presenting Author