The determinants of immigration

from Mexico to the United States:

a state-to-state analysis

Nathan J. Ashby*, Avilia Bueno and Deborah Martı́nez Villarreal

Department of Economics and Finance, University of Texas at El Paso,El Paso, TX 79968, USA

The determinants of undocumented immigration flows fromMexican statesto US states utilizing data recently released by the Mexican Consulate areanalysed. The results generally support that immigrants tend towards stateswith higher Mexican immigrant populations, shorter distances, higherwages and smaller populations.

Keywords: immigration; Mexico; the United States

JEL Classification: F2; J1

I. Introduction

Mexican Consulate data recently made availablethrough the Instituto de Mexicanos en el Exterior

(IME, 2011) provide information that has been dif-ficult to gather in the past. These records report the

number of Mexicans in the United States who reg-ister for a Mexican identification card at a particu-lar locality in the United States while providing

information on the locality from which they origi-nate in Mexico. This enables analysis of immigra-tion flows from Mexican states to US states, which

has not been possible in the past. Furthermore, themajority of these individuals who register with the

consulate within a given year are likely to beunauthorized immigrants (Massey et al., 2010), agroup that has been significantly undercounted by

census surveys.1

Using a migration model, the relationshipbetween relative wages, employment, weather and

Mexican geographic networks and undocumentedimmigration flows from the 32 Mexican states tothe 50 US states is analysed. A double-log scaleOLS method is employed to avoid losing observa-tions where no known immigration has taken placein addition to unscaled regressions, which omit cen-

sored values due to unmeasured immigration(Eichengreen and Irwin, 1995; Lewer and Van denBerg, 2008). Tobit, instrumental variable Tobit andTwo-Stage Least Squares (2SLS) are employed todeal with the censoring problem and the potentialendogeneity between the covariates.

II. The Model

The basic model used in this analysis is shown in thefollowing equation:

*Corresponding author. E-mail: njashby@utep.edu1Many individuals living in locations in the United States that border Mexico commute between the two countries, sometimesdaily. Many legal immigrants in this situation choose to purchase the card issued by the Mexican Consulate as a cheapersolution. Anecdotally, we know this to be the case for many but definitely not all Mexican immigrants living on the border.However, we have no data to determine the prevalence of this practice among border immigrants.

Applied Economics Letters ISSN 1350–4851 print/ISSN 1466–4291 online # 2013 Taylor & Francishttp://www.tandfonline.com

http://dx.doi.org/10.1080/13504851.2012.727964

638

Applied Economics Letters, 2013, 20, 638–641

LnMigrationij

¼ b0 þ b1 Ln ðPopulationj=PopulationiÞþ b2 LnðWagesj=WagesiÞþ b3 ðEmploymentGrowthj � EmploymentGrowthiÞþ b4 Ln ðUnemploymentj=UnemploymentiÞþ b5 Ln ðMexicanjÞ þ b6 LnDistanceij

þ b7 Ln ðTemperaturej=TemperatureiÞþ b8 Ln ðPrecipitationj=PrecipitationiÞ þ eij ð1Þ

Specifying the variables in relative terms has been doneby Clark et al. (2007) and Ashby (2007, 2010). In thismodel, the subscript i represents the Mexican state oforigin, while the subscript j represents the US state ofdestination. Since there are 32 Mexican States and 50US states, there are a total of 1600 observations.Distanceij is measured between major cities for each

state i to the population-weighted centre of each statej. Temperaturej/Temperaturei and Precipitationj/Precipitationi are the relative annual temperaturesand rainfall between j and i, respectively.Migrationij is the number of immigrants that

applied for the Mexican Consulate card in each USstate j in the year 2007 and the Mexican state i fromwhich they originated. Populationj/Populationi isthe average relative population between 2000 and2007. Wagesj/Wagesi is the relative averageweekly wages between 2000 and 2007. EmploymentGrowthj - Employment Growthi is the difference inthe average employment growth between 2000 and2007 between the destination and origin state; thisvariable is an absolute difference instead of a relativemeasure because of the problems that arise whendividing by a negative number. Unemploymentj/Unemploymenti is the average of the unemploymentrate between 2000 and 2007.Mexicanj is the estimated number of individuals ori-

ginating from Mexico residing in each US state in theyear 2000.The US Census does not provide actual dataon the number of Mexican immigrants by state in theyear 2000. However, the American Community Surveydoes provide this information for the year 2009. The2000 Mexican population by US state is imputed byestimating the percentage change in the LatinAmerican immigrant population for each US statebetween 2000 and 2009. Admittedly, this measure isnot perfect in that it assumes that the percentage changein the Mexican population for each state during thisperiod is equal to the percentage change in the LatinAmerican population. It is, however, preferred to usingthe total Hispanic population by US state which is toohighly aggregated to capture Mexican immigrant net-works within the United States.

The variables discussed in the previous two para-graphs are potentially endogenous. To control theendogeneity of these variables, instrument variablesare used in the 2SLS and instrumental variable Tobitregressions.2 The instruments used are EconomicFreedomj/EconomicFreedomi, Creativityj, Crimej/Crimei, Mining_GDPj, Singleratioj/Singlemotheri andFemalej/Femalei. The Appendix includes furtherdescription of the variables and the sources used inthis study.It should be noted that the benefits of attaining the

consulate card vary from state to state depending onwhether the card is recognized as a form of identifica-tion. The 11 states that recognize the consulate card asa form of identification are controlled using a dummyvariable which is not reported for conciseness.

III. Empirical Results

Table 1 reports regressions for six estimators. Mostregressions control both state-of-origin and state-of-destination fixed effects. Due to severe collinearity,important variables are dropped when controllingfor fixed effects in the 2SLS estimates. For this reason,the reported estimates for the two regressions employ-ing 2SLS do not control fixed effects. The instrumentsused are generally strong as demonstrated by the largeF-statistics in the first-stage regressions and relevanttests (Angrist and Pischke, 2009) and the Wald exo-geneity test for the IV Tobit.The network effect measured by the number of pre-

vious immigrants demonstrates a robust positive rela-tionshipwith immigration. Distance yields the expectednegative sign in all regressions. The positive coefficientson all but one regression for relative wages suggest thatundocumented immigrants are attracted to US stateswith higher wages. However, these results are statisti-cally significant in only two regressions. The differencein employment growth demonstrates a statistically sig-nificant positive impact in the unscaled 2SLS regressionand a negative impact in the two OLS regressions.Finally, Mexican immigrants appear to be attracted toUS states with relatively smaller populations.The coefficient estimates for the IV Tobit are likely

to be most reliable, but due to inflated SEs caused bycollinearity issues, it is difficult to infer statistical sig-nificance of these estimates.

IV. Conclusion

The determinants of undocumented immigrationbetween Mexican and US states are analysed in thisstudy using new data provided by the Mexican

2For Two-Stage Least Squares (2SLS), we use ivreg2 command in STATA constructed by Baum et al. (2010).

Immigration from Mexico to the United States 639

Consulate. These data are a valuable resource as theyprovide a good estimate of the destination and origin ofmany unauthorized immigrants from Mexico, a groupwhich tends to be undercounted in census estimates.Various estimation techniques are used to analyse

the determinants of undocumented immigration fromMexico. The estimates suggest that immigrant net-works and distance between states appear to berobustly associated with immigrant location choice,while weaker evidence is provided with regard to therelationship between immigration and wages.

References

Angrist, J. D. and Pischke, J. S. (2009) Mostly HarmlessEconometrics: An Empiricist’s Companion, PrincetonUniversity Press, Princeton, NJ.

The Annie E. Casey Foundation (2011) National Kids CountProgram. Available at http://datacenter.kidscount.org/data/acrossstates/Rankings.aspx?loct=2&by=a&order=a&ind=106&dtm=430&tf=18 (accessed 30September 2011).

Ashby, N. J. (2007) Economic freedom and migration flowsbetween US states. Southern Economic Journal, 73,677–97.

Ashby, N. J. (2010) Freedom and international migration,Southern Economic Journal, 77, 49–62.

Ashby, N. J., Karabegovic, A., McMahon, F., et al. (2010)Economic Freedom of North America 2010, FraserInstitute, Vancouver, BC.

Baum, C. F., Schaffer, M. E. and Stillman, S. (2010)ivreg2: Stata Module for Extended InstrumentalVariables/2SLS, GMM and AC/HAC, LIML andk-class Regression. Available at http://ideas.repec.org/c/boc/bocode/s425401.html (accessed6 September 2012).

Catalytix Inc. and the Richard Florida Creativity Group(2003) The first ever rankings of the 50 states on thecreativity index, Creative Intelligence, 1, 1–5. Availableat http://www.creativeclass.com/rfcgdb/articles/Creati-vity%20Index%20Rankings%20for%20U.S.%20States.pdf (accessed 30 September 2011).

Clark, X., Hatton, T. and Williamson, J. G. (2007)Explaining US immigration, 1971–1998, Review ofEconomics and Statistics, 89, 359–73.

Eichengreen, B. and Irwin, D. A. (1995) Trade blocs,currency blocs and reorientation of world trade in the1930s, Journal of International Economics, 38, 1–24.

Heston, A., Summers, R. and Aten, B. (2009) Penn WorldTable Version 6.3, Center for InternationalComparisons of Production, Income and Prices at theUniversity of Pennsylvania, Philadelphia, PA.

Instituto de Mexicanos en el Exterior (IME) (2011)Estadisticas de Mexicanos en el Exterior. Availableat http://www.ime.gob.mx/index.php?option=com_content&view=article&id=19&Itemid=536&lang=es(accessed 19 April 2011).

Lewer, J. J. and Van den Berg, H. (2008) A gravity model ofimmigration, Economics Letters, 99, 164–7.

Massey, D. S., Rugh, J. S. and Pren, K. A. (2010) Thegeography of undocumented Mexican migration,Mexican Studies, 26, 129–52.

Table 1. Regression results

Coefficients (SEs)

Scaled OLS Unscaled OLS Scaled 2SLS Unscaled 2SLS Tobit IV Tobit

Ln(Popj/Popi) -4.17*** -4.49*** -0.45** -0.37** -1879.10** -3259.06(0.46) (0.54) (0.18) (0.16) (857.03) (2011.80)

Ln(Wagesj/Wagesi) 8.22*** 8.38*** 2.78 -0.12 2044.21 17509.18(1.67) (1.87) (1.96) (1.17) (3773.20) (13 827.21)

Employ. Growthj - Employ.Growthi -1.60*** -1.73*** 0.06 0.31** -421.39 -1778.67(0.34) (0.40) (0.24) (0.15) (723.98) (1829.82)

Ln(Unemployj/Unemployi) 0.04 0.13 1.56*** 0.90*** 433.16 -2010.86(0.13) (0.10) (0.50) (0.25) (370.96) (1704.88)

Ln Mexicanj 9.36*** 10.08*** 0.73*** 0.97*** 4619.12*** 4771.42**(0.82) (0.97) (0.16) (0.10) (1421.29) (2296.61)

Ln Distanceij -1.25*** -1.42*** -0.90*** -0.44** -1087.36*** -1077.45***(0.17) (0.18) (0.35) (0.19) (499.42) (390.02)

Ln(Tempj/Tempi) -16.23*** -17.74*** -0.92 -2.06*** -7272.19*** -7750.62(1.48) (1.74) (0.76) (0.51) (3414.49) (5030.53)

Ln(Precipj/Precipi) -1.29*** -1.49*** -0.05 0.37** -1106.61** -59.66(0.33) (0.38) (0.29) (0.18) (506.30) (1238.23)

R2 0.8779 0.8596 – – – –Destination effects Y Y N N Y YOrigin effects Y Y N N Y YObservations 1600 1406 1600 1406 1600 1600

Notes: Dependent variables: LnMigrationij for OLS and 2SLS andMigrationij for Tobit. Regressions are run using robust SEsadjusted for heteroscedasticity in STATA Version 11.1 (STATA Corp., College Station, TX, USA). Variables treatedendogenously are given in bold and italics. Due to severe collinearity, 2SLS cannot be run with fixed effects while instrumentingfor all endogenous variables. 2SLS, Two-Stage Least Squares.*** and **Indicate 1% and 5% probabilities, respectively, for a two-tailed test.

640 N. J. Ashby et al.

Appendix: Data Sources

Population, the female sex ratio and the number ofMexican residents by state in the United States areobtained from the US Census Bureau. Population,employment, unemployment, the percentage of sin-gle mothers and the percentage of female births inMexico between 1980 and 1990 are obtained fromthe Intituto Nacional de Estadistica y Geografia.Wage, employment and unemployment data forthe United States are obtained from the Bureau ofLabor Statistics. Wage data in Mexico are obtainedfrom Comision Nacional de Salarios Minimos.Temperature and precipitation data are obtainedfrom the National Climate Data Center in the

United States and the Comision Nacional delAgua in Mexico. The economic freedom measuresare taken from Ashby et al. (2010). The creativityindex is obtained from Catalytix Inc. and theRichard Florida Creativity Group (2003). Thesources of crime measures are obtained from theFederal Bureau of Investigation in the UnitedStates and Instituto Ciudadano de Estudios Sobrela Inseguridad in Mexico. The single parent ratio inthe United States is taken from The Annie E. CaseyFoundation (2011). Mining GDP data for US statesare obtained from the Bureau of EconomicAnalysis. The Penn World Tables constructed byHeston et al. (2009) is used to construct the wagePPP estimates for the Mexican data.

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