Internal Migration and Convergence in Mexico 2000-2010

Abstract

This paper investigates whether internal migration has long-term effects on conditional convergence across functional territories in Mexico. Using an instrumental variable approach, we find that controlling for net migration inflows increases the convergence term, which indicates that migration flows reduce convergence among functional territories. Furthermore, when we interact migration inflows with initial income in our growth equations, appropriately instrumenting migration, our results show that migration flows lead to lower growth on average, and they also have a divergent effect, since growth is faster in territories that exhibit higher migration inflows along with a higher initial income. Moreover, there appears to be heterogeneity across the territory growth distribution, which could be an indicator of clubs convergence.