Understanding different migrant selection patterns in rural and urban Mexico

The productive characteristics of migrating individuals, emigrant selection, affect welfare. The empirical estimation of the degree of selection suffers from a lack of complete and nationally representative data. This paper uses a dataset that addresses both issues: the ENET (Mexican Labor Survey), which identifies emigrants right before they leave and allows a direct comparison to non-migrants. This dataset presents a relevant dichotomy: it shows negative selection for urban Mexican emigrants to the United States for the period 2000-2004 together with positive selection in Mexican emigration out of rural Mexico to the United States in the same period. Three theories that could explain this dichotomy are tested. Whereas higher skill prices in Mexico than in the US are enough to explain half of the negative selection result in urban Mexico, its combination with network effects and wealth constraints fully accounts for positive selection in rural Mexico.