Cross-Border Earnings of U.S. Natives Along the U.S.-Mexico Border

Authors


  • *Direct correspondence to Marie T. Mora or Alberto Dávila, Department of Economics and Finance, University Texas–Pan American, Edinburg, TX 78539 〈mtmora@utpa.edu〉; 〈adavila@utpa.edu〉. Mora will share the data and coding for replication purposes. We express our appreciation to Madeline Zavodny and Manuel Pastor for their comments and suggestions on earlier versions of this article, as well as to Ms. Alma D. Hales for her excellent research assistance. We also thank the reviewers of this article. All errors in fact or interpretation are our own.

Abstract

Objective. This study explores whether the earnings of U.S.-born cross-border workers differ from those of their U.S.-employed counterparts. We also analyze whether the cross-border/non-cross-border wage differential changed during the 1990s—a decade when U.S.-Mexico trade intensified and the maquiladora industry expanded.

Methods. Employing decennial U.S. Census data from 1990 and 2000, this article estimates earnings functions and uses wage decomposition analysis to study changes in the earnings of U.S.-born Hispanic and non-Hispanic cross-border workers.

Results. The number of U.S.-native cross-border workers, while relatively small, increased significantly between 1990 and 2000, as did their earnings. A closer examination reveals that this cross-border earnings premium only developed among non-Hispanics.

Conclusions. These findings indicate that some U.S. natives find lucrative employment opportunities on the Mexican side of the border, which might be diminished by additional restrictions for U.S.-born residents to easily cross back and forth into Mexico.

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