Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70656
Authors: 
Mandelman, Federico S.
Zlate, Andrei
Year of Publication: 
2012
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2008-25b
Abstract: 
Using data on border enforcement and macroeconomic indicators from the United States and Mexico, we estimate a two-country business cycle model of labor migration and remittances. The model matches the cyclical dynamics of unskilled migration and documents the insurance role of remittances in consumption smoothing. Over the cycle, immigration increases with the expected stream of future wage gains, but it is dampened by a sunk emigration cost. Migration barriers slow the adjustment of the stock of immigrant labor, enhancing the volatility of unskilled wages and remittances. Changes in border enforcement have asymmetric welfare implications for the skilled and unskilled households.
Subjects: 
labor migration
sunk emigration cost
skill heterogeneity
international business cycles
Bayesian estimation
JEL: 
F22
F41
Document Type: 
Working Paper

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