239
[Journal of Political Economy, 2005, vol. 113, no. 2]

2005 by The University of Chicago. All rights reserved. 0022-3808/2005/11302-0003$10.00
International Migration, Self-Selection, and the
Distribution of Wages: Evidence from Mexico
and the United States
Daniel Chiquiar
Banco de Me´xico
Gordon H. Hanson
University of California, San Diego and National Bureau of Economic Research
We use the 1990 and 2000 Mexican and U.S. population censuses to
test Borjas’s negative-selection hypothesis that the less skilled are those
most likely to migrate from countries with high skill premia/earnings
inequality to countries with low skill premia/earnings inequality. We
find that Mexican immigrants in the United States are more educated
than nonmigrants in Mexico; and were Mexican immigrants to be
paid according to current skill prices in Mexico, they would be con-
centrated in the middle of Mexico’s wage distribution. These results
are inconsistent with the negative-selection hypothesis and instead
suggest that there is intermediate selection of immigrants from
Mexico.
I. Introduction
In recent decades, rising immigration from poor countries has made
the U.S. labor force larger, younger, and less skilled than it otherwise
We thank Kate Antonovics, Julian Betts, Richard Carson, Gary Ramey, James Rauch,
Chris Woodruff, and seminar participants at American University, the Banco de Me´xico,
the Central Intelligence Agency, El Colegio de Me´xico, the University of Houston, the
NBER, Occidental College, Stanford University, University of California at Berkeley and
San Diego, the University of Toronto, and Yale University for helpful comments. Opinions
in this paper correspond to the authors and do not necessarily reflect those of the Banco
de Me´xico.

240 journal of political economy
would have been (Borjas 1999). The shift in the composition of im-
migrants appears due in part to the 1965 Immigration Act, which relaxed
long-standing country of origin restrictions on immigrant admissions.
In an important body of work, Borjas (1987) argues that who migrates
to the United States from a particular country will depend on that
country’s wage distribution. In countries with high returns to skill and
high wage dispersion, as in much of the developing world, there will
be negative selection of immigrants. Those with the greatest incentive
to migrate to the United States will be individuals with below-average
skill levels in their home countries. In countries with low returns to skill
and low wage dispersion, as appears to be the case in western Europe,
there will be positive selection of immigrants. Those with above-average
skill levels will have the greatest incentive to migrate. In support of this
selection hypothesis, Borjas (1987, 1995) finds that as sources for U.S.
immigration have shifted from Europe to Asia and Latin America, the
economic performance of new immigrants has deteriorated. Relative to
earlier cohorts, recent immigrants earn lower wages than natives at time
of arrival and take longer for their earnings to converge to native levels.1
These findings counter an earlier belief that, irrespective of country of
origin, immigrants have high potential for earnings growth (Chiswick
1978).2
Largely missing in the discussion of U.S. immigration is evidence from
source countries. Surprisingly, there is little work on how the skills of
immigrants compare to the skills of nonmigrating individuals in coun-
tries of origin. Such data are essential to evaluate the nature of migrant
selection. One exception is Ramos (1992), who uses 1980 census data
for the United States and Puerto Rico. Consistent with negative selec-
tion, nonmigrants in Puerto Rico are more educated than individuals
migrating from Puerto Rico to the United States and less educated than
those migrating from the United States to Puerto Rico.3
In this paper, we use data from the 1990 and 2000 Mexican population
censuses and data on Mexican immigrants in the 1990 and 2000 U.S.
population censuses to examine who in Mexico migrates to the United
States and how their earnings and observable skills compare to those
who remain at home. Mexico is the largest source country for U.S.
1 Identifying changes in the average quality of immigrant cohorts is complicated by
changes in unobserved cohort quality, immigrant assimilation, and labor market distur-
bances that vary by skill group. See LaLonde and Topel (1992, 1997), Borjas (1999), and
Butcher and DiNardo (2002) on how to deal with this issue.
2 Evidence of positive selection includes brain drain from poor countries (Carrington
and Detragiache 1998; Beine, Docquier, and Rapoport 2001) and the internal migration
of skilled workers (Borjas, Bronars, and Trejo 1992; Bound and Holzer 2000).
3 To compare Ramos’s results to ours, it is important to note that many costs of migrating
to the United States that are relevant for Mexico (binding quotas, border enforcement,
and bureaucratic delays) are not relevant for Puerto Rico.