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Abstract

Using data from the Mexican Family Life Survey (MxFLS), a panel of Mexican individuals interviewed in 2002 and 2005, we analyse the characteristics of migrants from Mexico to the US relative to non-migrants and those who migrated and subsequently returned to Mexico. Using pre- and post-migration earnings and their earnings in the US from the American Community Survey (ACS), we characterise the selection of migrants on observable and non-observable characteristics. Merging the data with US ACS data, we can also measure the expected earnings premium of migration to the US and the earnings premium for those that returned to Mexico. We find that migrants respond to the expected earnings premium to migration, once we control for migration costs. Also, the structure of the premium across skill groups generates negative selection on average and it can explain selection on observable and unobservables. We also find that returnees are more positively selected over skills than migrants to the US. Initial poverty, old age and family ties are strong deterrents of migration to the US, once we account for the skill-specific migration premium. We also find a strong under-representation of college educated among migrants to the US, possibly a consequence of the fact that undocumented migration is not an attractive option for those individuals.