Intergenerational transmission of abilities and self-selection of mexican immigrants

This article presents an intergenerational self-selection model of migration and education that is capable of explaining the evolution of earnings and education across three generations of immigrants. By structurally estimating the model, it is possible to quantify the sacrifices made by the first generation of Mexican immigrants for the benefits of future generations. In particular, the estimation results suggest that there is a significant one time loss of human capital of immigrants upon migration, that migrants are positively selected from the ability distribution, and that they transmit substantial human capital to their children. Finally, the model is used to evaluate the effects of social policies designed to reduce the "brain drain" from Mexico to the United States. © (2011) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.