Low-Skilled Mexican Immigrants Are Making The US Labor Market More Efficient

A recent NBER study has found that low-skilled Mexican immigrants are more responsive to changes in employment, and are quick to relocate when there is a period of high unemployment in the area they live in.

This is good for an economy that often has a surprising number of jobs that go unfilled.

The authors, Brian Cadena of the University of Colorado- Boulder and Brian Kovak from Carnegie Mellon University found that between 2006 to 2010, in towns where the Great Recession had caused unemployment of 10%, the population of Mexican immigrants dropped by 7.6%. In contrast, the population of low-skilled native workers did not decline at all, while that of high-skilled workers declined by 5.3%.

Essentially, immigrant Mexican workers had no qualms about moving to an area with greater opportunities for employment, unlike their native-born counterparts.

This high geographic mobility has had a net positive effect on the local low-skilled population as well. The Mexican immigrants moving out means that more jobs are freed up for native workers.

Mexican immigrants are not inherently nomadic; when there are jobs available locally, they are unlikely to move, just like native workers.

But there are many reasons why Mexican immigrants are quicker to react to changes in demand for their labor. One reason for their mobility is that they usually do not have or are not eligible for Unemployment Insurance (UI) and other social safety net programs, and so are completely dependent on the wages they earn.

Another reason is that most Mexican immigrants intend a relatively short stay in the US. They plan to work until they have saved up some capital to take back to Mexico. Because of this, they are likely to find unemployment costlier than native workers, and are more willing to do whatever it takes to find new employment quickly.

Mexican immigrants also have access to strong social and familial networks in most parts of the country. These networks provide them with information about the employment situation in different parts of the country. These networks also lower their costs of moving and provide them with contacts in the job market, which help them find employment quicker.

Read the paper at NBER.org.