Immigration, remittances and business cycles

► We build a two-country business cycle model of labor migration and remittances. ► Labor migration involves a trade-off between the sunk cost and future wage gains. ► The estimation uses macro and border enforcement data from the U.S. and Mexico. ► We match the pattern of U.S. unskilled immigration and remittances to Mexico. ► Migration has asymmetric welfare effects on the skilled and unskilled households.