Aroca, PatricioMaloney, William F.2013-12-202013-12-202005-09-01World Bank Economic Reviewdoi:10.1093/wber/lhi017https://hdl.handle.net/10986/16433Part of the rationale for the North American Free Trade Agreement (NAFTA) was that it will increase trade and foreign direct investment (FDI) flows, creating jobs and reducing migration to the United States (U.S.). Since poor data on illegal migration to the United States make direct measurement difficult, data on migration within Mexico, where census data permit careful analysis, are used instead to evaluate the mechanism behind predictions on migration to the United States. Specifications are provided for migration within Mexico, incorporating measures of cost of living, amenities, and networks. Contrary to much of the literature, labor market variables enter very significantly and as predicted once possible credit constraint effects are controlled for. Greater exposure to FDI and trade deters outmigration, with the effects working partly through the labor market. Finally, some tentative inferences are presented about the impact of increased FDI on Mexico- U.S. migration. On average, a doubling of FDI inflows leads to a 1.5 to 2 percent drop in migration.en-USCC BY-NC-ND 3.0 IGOARBITRAGEASYMMETRIC INFORMATIONBULLETINCENSUS OF POPULATIONCENTRAL BANKCONSUMER PRICE INDEXCOST OF LIVINGCREATING JOBSCULTURAL CHANGEDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSEARNINGECONOMETRICSECONOMIC ANALYSISECONOMIC INTEGRATIONECONOMIC RESEARCHECONOMICS OF IMMIGRATIONEDUCATIONAL ATTAINMENTELASTICITYEMPLOYMENT GROWTHEMPLOYMENT LEVELSEQUILIBRIUM WAGESEXCESS SUPPLYEXPECTED WAGESEXPORTSEXTERNALITIESFAMILY RESPONSIBILITIESFISCAL POLICYFOREIGN DIRECT INVESTMENTFREE TRADEFUTURE GROWTHGDPGDP PER CAPITAHEALTH INFRASTRUCTUREHOSPITALHOSPITAL BEDSHOUSEHOLD INCOMEHOUSINGHUMAN RESOURCESILLEGAL IMMIGRATIONIMMIGRATIONIMMIGRATION REFORMIMPERFECT COMPETITIONINCREASING RETURNSINCREASING RETURNS TO SCALEINNOVATIONSINTERNAL MIGRATIONINTERNATIONAL MIGRATIONINTERNATIONAL MIGRATION REVIEWINTERNATIONAL TRADEJOB SEARCHLABOR FORCELABOR MARKETLABOR MARKET IMPACTLABOR MARKET VARIABLESLABOR MARKETSLABOR MIGRATIONLABOR STATISTICSLABOR SUPPLYLABOURLABOUR FORCELDCSLIQUIDITYLOCAL LABOR MARKETMIGRANTMIGRANTSMIGRATIONMIGRATION DATAMIGRATION FLOWSMORTALITYMUNICIPALITIESNOMINAL WAGESNURSESOPPORTUNITY COSTSPER CAPITA INCOMEPOLICY ANALYSISPOLICY RESEARCHPOLITICAL ECONOMYPREVIOUS STUDIESPURCHASING POWERPURCHASING POWER PARITYQUALITY OF LIFEREAL WAGERENTSRESPECTRETIREMENTSAVINGSSECONDARY SCHOOLSSKILLED WORKERSSOCIAL SECURITYSPILLOVERSPOUSESTATE UNIVERSITYSUBSTITUTION EFFECTSUBSTITUTION EFFECTSTRADE FLOWSTRADE LIBERALIZATIONTRANSPORTTRANSPORTATIONUNDOCUMENTED IMMIGRANTSUNDOCUMENTED IMMIGRATIONUNEMPLOYEDUNEMPLOYMENTUNEMPLOYMENT RATEUNEMPLOYMENT RATESUNSKILLED WORKERSURBAN AREASURBAN EMPLOYMENTURBAN EMPLOYMENT SURVEYUTILITY FUNCTIONUTILITY THEORYVALUE ADDEDWAGE DIFFERENTIALSWAGE EFFECTWAGE GROWTHWAGE LEVELWAGE RATEWAGESWEALTHWORKERYOUNG MENJournal ArticleWorld Bank10.1596/16433