Migrant self-selection in the presence of random shocks. Evidence from the Panic of 1907

Apr 2020 | 179

Authors: David Escamilla-Guerrero, Moramay Lopez-Alonso

We evaluate the responsiveness of migrant self-selection to short-run changes in the economic environment. Using novel historical micro data, we estimate the initial selectivity of Mexican migration (1906-08) and focus on labor institutions as short-run adjustment channels of self-selection. We find that the first Mexican migrants were positively self-selected on the basis of height—a proxy for physical productivity of labor. Additionally, the US financial crisis of 1907 significantly modified self-selection. Shifts in migrant self-selection during and after the crisis were influenced by the enganche, an institution that reduced migration costs, but only for the “best” Mexicans during “good” economic times.

JEL Codes: F22, J61, N36, O15

Keywords: labor migration, migrant self-selection, Panic of 1907, Mexico

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