Relative Deprivation, Wage Differentials and Mexican Migration

Abstract

This paper constructs and tests a model that incorporates relative deprivation into the migration decision. Relatively deprived individuals view their situations as less than a community standard. Another innovation of this paper is the utilization of a cluster approach to wage differentials. This cluster method takes account of individual characteristics while avoiding the severe multicollinearity problems inherent in the standard wage equation approach. Using data from the Mexican Migration Project, relative deprivation is found to be a significant motivating factor in domestic migration decisions. The results also suggest that Mexico-US migration may be increasing relative deprivation in Mexican communities. For policymakers, the results indicate that policies attempting to slow domestic rural-to-urban migration must address both relative and absolute outcomes in communities. Investments in communities that raise aggregate incomes, but increase relative deprivation, could result in an increase in migration out of the community, not in a decrease as intended. Copyright � 2006 The Authors; Journal compilation � 2006 Blackwell Publishing Ltd.

Does Development Reduce Migration?

“…The micro studies begin with Taylor (1989, 1991), who find a positive association between purely relative deprivation and emigration from a small part of rural Mexico, just as Bhandari (2004) and Quinn (2006) find in other settings. Reversing the direction of causation, McKenzie and Rapoport (2007) find that migration tends to reduce inequality in Mexico.…”

“…Finally, two of the micro studies investigate the association between exclusively relative economic resources and migration, finding that lower migration rates are associated with greater relative access to land in Nepal (Bhandari 2004) and higher relative wages in Mexico (Quinn 2006). But these studies control for absolute measures of assets (e.g.…”

“…Reversing the direction of causation, McKenzie and Rapoport (2007) find that migration tends to reduce inequality in Mexico. Quinn (2006) what they perceive as realistic, which in turn can be shaped on overseas restrictions on demand for foreign labor. Expressed intent is not, then, a pure measure of labor supply.…”

Migration Magnet: The Role of Work Experience in Rural-Urban Wage Differentials in Mexico

“…the perception of an individual or household to be worse o or disadvantaged compared to a particular reference group, for example, other people in the same village (Quinn, 2006, Stark and Taylor, 1989, 1991. Quinn (2006) uses the data from the Mexican Migration…”

The merger of populations, the incidence of marriages, and aggregate unhappiness

“…) One branch of this body of research has dealt with migration. Several studies have shown empirically that a concern for relative deprivation impacts significantly on migration outcomes (Stark and Taylor 1989;Stark and Taylor 1991;Quinn 2006;Stark et al 2009). Theoretical expositions have shown how the very decision to resort to migration and the choice of migration destination (Stark 1984;Stark and Yitzhaki 1988;Stark and Wang 2007;Stark and Fan 2011;Fan and Stark 2011), as well as the assimilation behavior of migrants (Fan and Stark 2007), are modified by a distaste for relative deprivation.…”