Changes in the Relative Earnings Gap between Natives and Immigrants
Along the U.S.-Mexico Border
Alberto Dávila
Professor and V.F. “Doc” and Gertrude Neuhaus Chair for Entrepreneurship
Department of Economics and Finance
College of Business Administration
University of Texas—Pan American
Edinburg, TX 78541 USA
Fax: 011-956-384-5020; [email protected]
and
Marie T. Mora
Associate Professor
Department of Economics and Finance
College of Business Administration
University of Texas—Pan American
Edinburg, TX 78541 USA
Fax: 011-956-384-5020; [email protected]
March 2006
Preliminary Draft: Please do not quote without permission from the authors.
Changes in the Relative Earnings Gap between Natives and Immigrants
Along the U.S.-Mexico Border
Abstract
Using 1990 and 2000 U.S. census data, this study investigates changes in the immigrant/native
earnings disparities for workers in U.S.-cities along the Mexican border vis-à-vis the U.S.-interior during
the 1990s. Our findings—based on estimating earnings functions and employing the Juhn-Murphy-Pierce
(1993 Journal of Political Economy) wage decomposition technique—indicate that the average earnings
of Mexican immigrants along the U.S.-Mexico border improved relative to those accrued by their U.S.born Mexican American counterparts during the 1990s. However, when comparing Mexican-born
workers to U.S.-born non-Hispanic whites, the immigrant border-earnings “penalty” remained statistically
unchanged between 1990 and 2000.
Changes in the Relative Earnings Gap between Natives and Immigrants
Along the U.S.-Mexico Border
Introduction
Workers along the U.S.-Mexico border earn less on average than those in the U.S. interior. This
stylized fact has been well researched, and by most accounts it has been at least attributed to the relatively
low levels of human capital along the border region.1 It has also been suggested that immigration serves
to depress wages in the region because of an assumed highly elastic labor supply of Mexican labor. In
pursuing this latter type of explanation for depressed earnings along the border, more recent studies by
Mora (forthcoming) and Mora and Dávila (2006a) have pointed to the importance of distinguishing
between U.S.-natives and Mexican immigrants, and have provided supporting evidence of significant
differences in the border/earnings disparity according to immigration status.
Extant recent literature, however, has not fully accounted for potential changes in regional
earnings gaps over time. This research void is particularly important to address owing to the socioeconomic changes that have occurred along the U.S.-Mexico border over the last fifteen years. For one,
the U.S.-Mexico border region has flourished as a result of increasing trade agreements between Mexico
and the U.S., particularly as a result of the North America Free Trade Agreement (NAFTA). This
enhanced trade might have had, and should continue to have, important labor market implications
regarding the relative demand for immigrant and native labor along the U.S.-Mexico border. With
regards to relative supply issues, immigration reform, starting most notably with the Immigration Reform
and Control Act of 1986 (IRCA), has also brought about an increase of border enforcement during this
time that might have impacted the labor flows between these two countries (e.g., Dávila, Pagán, and
Soydemir, 2002).
1
See, for example, Mora and Dávila (2006a); Mora (forthcoming); Flota and Mora (2001); Fullerton (2001); Dávila
and Mora (2000); Sharp (1998); Peach (1997); Dávila and Mattila (1985); and Dávila (1982).
1
This paper extends the foregoing border literature by empirically investigating how
immigrant/native earnings disparities changed for residents in U.S.-cities along the Mexican border vis-àvis the U.S.-interior during the 1990s. In addition to estimating standard earnings functions, we employ
the Juhn-Murphy-Pierce (1993) wage decomposition technique to analyze changes in immigrant/native
earnings differentials for border and non-border residents during this time period.
The findings from these analyses are important to a variety of policy-relevant issues. First, to
what extent is the aforementioned border-interior earnings gap a native or immigrant phenomenon?
Second, to the extent that rising trade opportunities with Mexico disproportionately favor U.S. cities
located near Mexico, do they similarly affect the earnings of Mexican immigrants as U.S.-born workers?
Answers to these questions are useful in designing a more comprehensive economic policy plan for the
border region that distinguishes between the labor-market experiences of natives and immigrants.
Moreover, such information is useful with respect to some of the intended (and unintended) consequences
of U.S. immigration policy.
Background and Conceptual Issues
According to neoclassical theory, regional earnings differentials should disappear over the long
run for at least three reasons. First, labor migration from low wage areas to high wage areas should
reduce the supply of labor in the former region and increase the supply of labor in the latter region. The
geographic changes in labor supply would lead to higher wages in those areas with depressed wages and
vice-versa.
The second reason for the eventual regional-wage conversion is that entrepreneurs and capital
would gravitate to those areas with relatively lower labor costs. The lower costs would in turn lead to
higher profits and, as a result, a stronger competitive position for capitalists. Capital migration to the
relatively low-wage areas would increase labor demand there at the expense of the demand for labor in
the high-wage region. As such, earnings would increase in the low wage areas vis-à-vis their high wage
counterpart.
2
Finally, those regions with lower earnings would be able to produce goods and services at lower
prices and would therefore attract consumer demand for its products. As in the case above, this
consumer-demand effect would drive labor demand in the region with lower earnings up relative to the
region with high earnings, leading to eventual wage equality between the two regions.
This theory assumes, of course, perfect mobility of human and capital resources and perfect
information. With regards to labor migration for the purposes of our study, there might be some
conceptual reasons to believe that immigrant and native labor would have different tendencies to migrate
as this theory predicts. On the one hand, it is possible that immigrant Mexican labor along the U.S.Mexico border is more mobile given that it has more migratory experience than native labor of the region.
On the other hand, the immigrant labor might be more attached to living close to Mexico than natives.
The neoclassical view presented here also holds if workers are homogeneous and are valued
equally by entrepreneurs and capital. This assumption is problematic when comparing Mexican
immigrants to U.S.-born workers in an era of the North American Free Trade Agreement (NAFTA). As
argued by Mora and Dávila (2006a), expanding trade opportunities with Mexico might have favored
bilingual and bicultural workers. In particular, Mexican-born workers on the U.S. side of the border
potentially face more employment and business opportunities than their U.S. born counterparts because of
the latters’ need to hire cultural “translators”, such as for language, insight into Mexican business
practices, and understanding the Mexican consumer.
In what follows, we employ this conceptual framework to discuss our results. Of particular
interest in this discussion is the identification of changes in the border-interior earnings gaps between
natives and Mexican immigrants over the 1990s as the results of increasing trade between the border
region and Mexico and changes in immigration reform.
Data and Empirical Results
We employ data from the 1990 and 2000 U.S. censuses available from Ruggles and Sobek, et al.
(2003) in the Integrated Public Use Microdata Series (IPUMS) to analyze the relative earnings of
Mexican immigrants along the US-Mexico border. Our sample includes U.S.- and foreign-born Mexican
3
Americans between the ages of 25 and 64 who worked for wages and salaries for at least 20 hours per
week for 32 weeks in the previous year. For the sake of comparison, we also consider the conventional
base-group of US-born non-Hispanic whites who only speak English at home. We exclude the selfemployed here because recent work illustrates that factors related to entrepreneurial activities
significantly differ between U.S.-cities located on the Mexican border versus the U.S.-interior (Mora and
Dávila 2006a; Mora, forthcoming; Flota and Mora 2001).
In this study, we define the border region as the eight identifiable metropolitan statistical areas
(MSAs) in counties located directly on the Mexican border (Brownsville, El Paso, Laredo, McAllen, in
Texas; Las Cruces in New Mexico; Tucson and Yuma in Arizona, and San Diego in California). Using
MSAs to define the border is consistent with a host of extant work (e.g., Mora and Dávila 2006a; Robles
2002; Flota and Mora 2001; Dávila and Mora 2000; Dávila and Mattila 1985; Smith and Newmann,
1977), although alternative definitions exist.2 Because municipalities with less than 100,000 individuals
cannot be identified in the IPUMS, we restrict the sample to workers in MSAs to avoid including those
who reside along the border—but outside of an MSA—in the U.S.-interior sample. To ensure an
adequate sample size for the border region, we use the 5% IPUMS for both years when constructing the
border MSA sample. The U.S.-interior sample is from the 1% IPUMS in 1990, and a random 20%
sample drawn from the 5% IPUMS in 2000;3 all analyses employ appropriate sampling weights.
Table 1 provides the average characteristics of Mexican immigrants, U.S.-born Mexican
Americans, and U.S.-born non-Hispanic whites in cities along the US-Mexico border and those in the
2
For example, some studies follow a “county-approach” to identify the border (e.g., Mora 2005; Fullerton 2001;
Peach and Adkisson 2000; Peach 1997), but such an approach is not possible when using the 1990 and 2000
IPUMS. However, most of the recent growth in trade and labor market opportunities along the border has occurred
in cities, such that we do not consider the lack of county information to be problematic. Also, while we are aware
that some researchers occasionally use interior cities in their border definitions, such as San Antonio, Texas, or Los
Angeles, California, because of their large Mexican populations, we believe that our border definition is superior
because cities physically located near the border possess specific cultural and economic interactions between the US
and Mexico that cannot be observed in the U.S.-interior.
3
We had initially planned to use the 1% IPUMS for 2000 to identify workers in the U.S.-interior. Unfortunately,
metropolitan areas with fewer than 400,000 individuals cannot be identified in the 1% sample that year; as such, we
use a randomly-drawn one-in-five sample from the larger 5% IPUMS (which identifies MSAs with at least 100,000
residents) for 2000.
4
interior. Despite higher average education levels in U.S. MSAs near Mexico, a border/interior earnings
gap exists for the three groups. Earnings are defined as the annual wage and salary income divided by
usual weekly work-hours times weeks worked. This finding indicates that low average wages along the
U.S.-Mexico border are not unique to immigrants, although on the surface, they had the largest borderearnings “penalty”. Moreover, while the immigrant/native earnings differential is larger in U.S.-border
cities than in the rest of the country when focusing on U.S.-born non-Hispanic whites, this was not the
case when considering U.S.-born Mexican Americans.
(TABLE 1 ABOUT HERE)
Of specific interest to this study are changes in these wage differentials between 1990 and 2000.
The average earnings gap between Mexican immigrants and U.S.-born Mexican immigrants narrowed
slightly along the border (from 28.7 percent to 26 percent), but increased in the U.S.-interior (from 28.7
percent to over 31 percent). Moreover, compared to non-Hispanic whites, the immigrant/native wage gap
increased in both border and non-border cities, but the increase in border cities was smaller. These results
suggest that, compared to their counterparts in the U.S.-interior, Mexican immigrants in areas close to
Mexico gained ground with respect to earnings relative to their U.S.-born peers.
Some of the earnings improvement for foreign-born versus U.S.-born Mexican Americans in
cities near Mexico presumably stems from the larger increase in the education levels of immigrants
between 1990 and 2000. The average schooling of Mexican-born workers residing close to their home
country rose by an entire year (from 8.9 to 9.9 years), compared to 0.7 years (from 8.3 to 9 years) for
those in the U.S.-interior. The increase in the average education of U.S.-born Mexican Americans and
non-Hispanic whites was similar between the border and interior regions (0.5 years for U.S.-born
Mexican Americans, and 0.3 years for non-Hispanic whites).
Additional observations in Table 1 are consistent with extant work (e.g., Mora and Dávila 2006a;
Dávila and Mora 2000) in that, compared to those in the U.S.-interior, Mexican immigrants in border
MSAs tend to be more “established” in the U.S. and possess greater levels of human capital. On average,
Mexican workers in U.S.-border cities have more education, more years of potential work experience
5
(measured by the convention of age – education – 5), higher English-language fluency (defined as the
ability to speak the English language “well”), longer U.S.-tenure, and a higher representation of female
workers than their counterparts in the rest of the U.S. Note that these differences intensified between
1990 and 2000, which might explain the larger rise in the immigrant/native earnings differential in nonborder versus border cities.
Earnings Regressions. For more insight, we now consider the extent to which these observable
differences explain changes in the immigrant/native earnings differentials between 1990 and 2000. In
particular, we first estimate a standard earnings function:
(1)
ln(W) = (Border) α1 + (Border x 2000IPUMS) α2 + X β1 + (X x 2000IPUMS) β2 + e ,
where ln(W) represents the natural logarithm of hourly earnings. The vector Border includes a binary
variable equal to one for workers in U.S.-border cities (= 0 otherwise), as well as an interaction term
between border residence and Mexican immigrants (= 1 for Mexican immigrants residing along the
border; = 0 otherwise). (Border x 2000IPUMS) denotes a vector of the variables in Border interacted
with a binary 2000IPUMS variable (=1 for individuals in the 2000 IPUMS; = 0 for 1990). As such, the
coefficient vector α1 reflects earnings “penalties” associated with residing along the U.S.-Mexico border,
while α2 measures changes in these penalties between 1990 and 2000.4 X is a vector of additional
variables that affect earnings [including being a Mexican immigrant (= 1 for immigrants; = 0 otherwise),
education, experience, experience-squared, limited-English-proficiency, immigrants’ time in the U.S.,
gender, and a constant term], while X x 2000IPUMS represents a vector of the variables in X interacted
with 2000IPUMS. Finally, e is the normally distributed error term.
Table 2 contains the results from estimating Equation (1) three times, using: (a) only Mexican
immigrants in the sample, (b) both Mexican immigrants and U.S.-born Mexican Americans, and (c )
Mexican immigrants and non-Hispanic whites. In all three cases, consistent with the border literature,
residing in cities along the U.S.-Mexico border relates to significantly lower earnings even when
4
For interpretative ease, we will discuss the estimated α’s as earnings “penalties” or “premiums”, but more refined
interpretations of estimated coefficients for binary variables in semi-logarithmic equations exist (see Kennedy
1981).
6
controlling for other observable characteristics; this border earnings penalty is particularly pronounced
among Mexican immigrants. However, when focusing on the first two columns, Mexican immigrants
along the border experienced an earnings improvement between 1990 and 2000 compared to their
counterparts in the rest of the U.S. (approximately 3.5 percent) as well as to U.S.-born Mexican
Americans (over four percent). These earnings gains suggest that something happened to favor
immigrants residing close to their home country in the 1990s beyond changes in their observable skill
levels. As we noted in the conceptual section above, the expansion in trade opportunities with Mexico
following NAFTA represents one explanation, and the (potentially) more mobile Mexican immigrant
population represents another (but not mutually exclusive) explanation.
(TABLE 2 ABOUT HERE)
At the same time, when including non-Hispanic white men as the base group of comparison,
Table 2 shows that the earnings of workers in U.S.-border cities did not change on average relative to
those in the rest of the country during the 1990s. That is, relative to non-Hispanic whites, Mexican
immigrants along the border continued to earn the same border “penalty” in 2000 as in 1990. Perhaps this
finding reflects changes (or the lack thereof) in the relative immigrant/native skill-differentials between
border and non-border metropolitan areas during the 1990s. We will discuss this issue in more detail
below.
Beforehand, other findings in Table 2 should be noted. First, Mexican Americans receive lower
returns to human capital than non-Hispanic white men; this observation presumably reflects the fact that
some of the Mexican immigrants’ skills were acquired abroad (e.g., McManus, Gould and Welch 1983).
Second, when focusing exclusively on foreign- and U.S.-born Mexican Americans, the returns to
schooling, experience, and U.S.-tenure fell slightly during the 1990s, suggesting that low-skilled workers
gained ground with respect to labor market income compared to their skilled counterparts; similar
findings have been noted elsewhere (e.g., Mora and Dávila 2006c). The inclusion of non-Hispanic whites
provides the expected increase in the returns to education and experience, as discussed by Welch (2000)
7
among others.5 While going beyond the scope of this study, this finding raises the question as to whether
the increasing returns to skills observed in recent years were primarily a non-Hispanic phenomenon;
future research should address this issue.
Regional Border Effects. One potential problem with the analyses thus far is the underlying
assumption regarding the homogeneity of the U.S.-Mexico border region—a region that stretches nearly
2,000 miles. Other studies have observed striking differences among U.S. cities located near Mexico
(e.g., Dávila, Schmidt and Ziegler 1984). As such, perhaps the observed relative improvement in the
earnings of Mexican immigrants in U.S.-border MSAs only occurred in one particular region. To address
this possibility, we re-estimate Equation (1) for the three samples while using four distinct border
variables: (1) El Paso, Texas and Las Cruces, NM; (2) South Texas (Brownsville, Laredo, and McAllen);
(3) Arizona (Tucson and Yuma), and (4) California (San Diego).
To conserve space, Table 3 reports the regression results related to these border variables; the
remaining results can be obtained from the authors. Concentrating on the Mexican immigrant sample,
with the exception of San Diego, California, those who resided in border metropolitan areas experienced a
significant earnings improvement of about 6-8 percent during the 1990s compared to similar workers in
other U.S. cities. Moreover, relative to U.S.-born Mexican Americans, Mexican immigrants in three of
the four border regions (this time, with South Texas as the exception) gained significant ground with
respect to labor market earnings between 1990 and 2000.
It appears that combining the border metropolitan areas into one general region does not distort
the overall observation that the average wages of Mexican immigrants in the region improved vis-à-vis
those earned by their counterparts in the U.S.-interior and by U.S.-born Mexican Americans, although the
extent of this improvement varied between specific border vicinities. Similar to the results in Table 2,
however, Table 3 shows that the average earnings of Mexican immigrants in U.S.-MSAs located close to
5
When including non-Hispanic whites in the sample, at first glance the positive coefficient on the limited-Englishproficient (LEP) variable is surprising. However, further robustness tests (available from the authors) indicate that
this appears to be a female-effect; excluding women from the sample provides the expected negative sign, although
its interaction with 2000IPUMS is positive and statistically significant. See Mora and Dávila (2006c) for a
discussion of recent changes in the effects of being LEP on the earnings of Hispanic men versus women.
8
Mexico did not significantly improve or decline during the 1990s when comparing them to non-Hispanic
whites.
(TABLE 3 ABOUT HERE)
Juhn-Murphy-Pierce Wage Decomposition. In short, Tables 2 and 3 indicate that when
comparing Mexican immigrants in U.S.-Mexico border cities to those in the rest of the U.S. and to U.S.born Mexican Americans, the average earnings of Mexican-born workers along the border increased,
ceteris paribus during the 1990s. However, when comparing their wages to those earned by nonHispanic whites, the border-earnings “penalty” remained statistically unchanged between 1990 and 2000.
As noted above, this finding might reflect relatively stable immigrant/native skill-differentials between
border and non-border MSAs during this time.
An empirical method to address this issue was developed by Juhn, Murphy, and Pierce (1993)—
henceforth JMP. The JMP technique allows for the analysis of wage differentials over time, not only in
terms of changes with respect to observable characteristics, but also in underlying wage structures. The
observable sources of earnings differentials are differences in the levels of human capital and the returns
to these factors between two groups. The unobservable factors include the levels of, and the returns to,
unmeasured characteristics such as innate ability.
Consider the following earnings function for U.S.-native workers (N) in year t:
(2)
ln(W)tN = XtN βtN + σtN θtN ,
where (W)tN equals the hourly earnings of this group, and XtN and βtN represent vectors of observable
characteristics and the returns to those characteristics. θtN denotes a normal standardized residual, while
σtN is the standard deviation of non-border residual earnings in year t. It follows that the wage differential
between natives and Mexican immigrants (M) in t can be expressed as:
(3)
∆Wt ≡ ln(W)tN - ln(W)tM = ∆Xt βtN + σtN ∆θt ,
where ∆ denotes the differences in the average variables in X and θ between the two groups of workers.
Extending Equation (3) to explore shifts in the immigrant/native wage differential between two
time periods (t-1 and t) yields:
9
(4)
∆Wt - ∆Wt-1 = (∆Xt - ∆Xt-1 ) βtN + ∆Xt-1 (βtN - βt-1N ) + (∆θt - ∆θt-1N )σtN + ∆θt-1 (σtN - σt-1N ) .
The four right-hand side terms measure the X-effect, the B-effect, the θ-effect, and the σ-effect.
The X-effect reflects how changes in average observable characteristics between two time periods
contributed to shifts in the immigrant/native wage differential, while the B-effect accounts for changes in
the returns to these characteristics. The θ-effect estimates shifts in unobservable skills and characteristics
over time, and the σ-effect captures changes in the returns to these unobservable characteristics between
Mexican immigrants and U.S.-born workers.6
Table 4 provides the results from estimating Equation (4) when partitioning the sample between
workers in U.S.-Mexico border MSAs and those in the U.S.-interior. We first define the native sample as
U.S.-born Mexican Americans (see the first two columns), and then as non-Hispanic whites (the last two
columns). The regression results for the native samples can be obtained from the authors.
(TABLE 4 ABOUT HERE)
The first two columns in Table 4 indicate that Mexican immigrants in U.S. cities on the Mexican
border gained significant ground with respect to earnings relative to U.S.-born Mexican Americans during
the 1990s: the immigrant/native wage gap fell by 2.7 percentage points in the region. In contrast,
Mexican-born workers in the U.S.-interior lost ground on average relative to their U.S.-born counterparts
between 1990 and 2000. Explanations behind these differences are seen in the four effects from the JMP.
While the B-effects indicate that the returns to observable skills in the 1990s should have increased the
immigrant/native wage differentials by around 0.065 log-points in both regions, Mexican immigrants
residing in U.S.-border MSAs offset this tendency because of relative gains in their skill levels—both
observed (the X-effect) and unobserved (the θ-effect).
Turning to the final two columns in Table 4, the earnings differential between Mexican
immigrants and non-Hispanic whites changed by a small 0.8 percentage-point for those along the U.S.Mexico border, but it widened by 4.3 percentage point for workers in other U.S. cities. The B-effect
predicts that the returns to observable skills in the 1990s should have increased these earnings
6
For further details on these effects, see Juhn, Murphy, and Pierce (1993) and Blau and Kahn (1997, 1994).
10
differentials between 0.05 (border) and 0.07 (non-border) log-points. But, Mexican workers in U.S.-cities
close to Mexico countered these skill-return-induced differential-increases because of their average skilllevel improvement vis-à-vis non-Hispanic whites (see the X-effect). Mexican-born workers residing in the
U.S.-interior did not fare as well; their relative skill improvements were not enough to dissipate the
increasing skill returns accrued by non-Hispanic whites.
Concluding Remarks
Our findings point to a marked difference in the earnings experience between Mexican
immigrants and Mexican Americans during the 1990s along the U.S.-Mexico border relative to their
interior counterparts. The conceptual issues section of our paper points to some potential explanations for
this result. In general, U.S. metropolitan areas near Mexico have higher immigrant/U.S.-born-MexicanAmerican wage differentials than cities in the U.S.-interior; perhaps over the 1990s there were signs of
wage convergence between these two groups as suggested by neo-classical theory. The results show,
however, that such convergence did not occur between Mexican Americans (both U.S.- and foreign-born)
and non-Hispanic whites.
The mechanics of the convergence of Mexican immigrant and Mexican American earnings along
the U.S.-Mexico border raises several conceptual possibilities. The first of these is that Mexican
immigrants are more mobile than Mexican Americans. This could be, as we noted above, because
Mexican immigrants who first move to the U.S.-Mexico border have a relative advantage, by virtue of
having been through the migratory process before, and are more predisposed to move to areas that offer
more attractive earnings. A second explanation pertains to the potential relative attractiveness for the
Mexican immigrant among entrepreneurs and capital because this population has the familiarity and the
skill set to more efficiently engage in trade with Mexican consumers and businesses.
Outside of these explanations follow others that might be more difficult to test. One possibility is
that the level of unmeasured factor endowments did not keep pace for Mexican Americans along the U.S.Mexico border relative to their interior counterparts during the 1990s, perhaps because of a declining
quality of education along this region relative to the interior. Another possibility is that the Mexican
11
American in this region has not received, in a relative sense, the on-the-job training necessary to compete
in labor markets along the U.S.-Mexico border.
Finding which of these explanations best explains our results is important for social science and
policy. For example, if the root cause of this finding depends on the relative immobility of resources,
perhaps programs that foster national labor-market information as well as more information about
business opportunities in the border region might help promote wage equality for Mexican Americans in
the U.S. However, if the primary source of the relatively depressed wages for Mexican Americans along
the U.S.-Mexico border stems from this population losing ground in terms of both the quantity and the
quality of its human capital, then programs designed to remedy this region’s educational and labor force
training infrastructures is warranted.
12
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13
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14
Table 1: Average Characteristics of Mexican Immigrants, Mexican Americans, and Non-Hispanic Whites
along the U.S.-Mexico Border and in the U.S.-Interior in 1990 and 2000
U.S.-Born Mexican
Americans
Mexican Immigrants
Characteristic
1990
2000
U.S.-Born Non-Hispanic
Whites
1990
2000
1990
2000
Residents of U.S. MSA along Mexican border:
Natural log. hourly
Earnings
1.810
(0.588)
2.154
(0.591)
2.097
(0.583)
2.414
(0.576)
2.427
(0.611)
2.779
(0.633)
Education
8.922
(4.581)
9.926
(4.200)
12.424
(2.898)
12.856
(2.591)
13.981
(2.288)
14.285
(2.312)
Experience
24.497
(11.864)
25.045
(11.156)
20.231
(10.799)
20.282
(10.019)
20.157
(10.296)
22.440
(10.132)
Years in U.S.
17.934
(10.657)
19.460
(10.696)
-----
-----
-----
-----
LEP
0.406
0.394
0.034
0.027
-----
-----
Female
0.385
0.389
0.442
0.460
0.428
0.441
N (unweighted)
7,522
12,336
10,814
12,593
36,427
35,186
159,206
264,569
226,017
279,039
763,778
760,533
N (weighted)
Residents of U.S. Interior MSA:
Natural log. hourly
Earnings
1.955
(0.583)
2.257
(0.567)
2.242
(0.600)
2.570
(0.580)
2.454
(0.603)
2.798
(0.624)
Education
8.321
(4.458)
8.990
(4.283)
12.261
(2.738)
12.701
(2.557)
13.669
(2.450)
14.001
(2.364)
Experience
22.737
(10.786)
23.113
(10.556)
20.553
(10.783)
20.616
(10.166)
21.308
(10.793)
22.933
(10.342)
Years in U.S.
15.114
(9.230)
16.228
(9.848)
-----
-----
-----
-----
LEP
0.457
0.463
0.028
0.023
-----
-----
Female
0.297
0.293
0.442
0.462
0.441
0.459
N (unweighted)
10,925
23,629
12,507
15,812
404,439
427,569
1,183,871
2,527,710
1,360,004
1,746,295
42,795,422
46,200,810
N (weighted)
Notes: The parentheses contain the standard deviations for the continuous variables. These statistics use the IPUMS-provided
sampling weights to maintain the national representation of the sample. The samples include workers employed for at least 20
hours per week for a minimum of 32 weeks in the previous year, and who resided in a metropolitan statistical area.
15
Table 2: Earnings Regression Results for Mexican Immigrants, U.S.-Born Mexican Americans, and U.S.Born Non-Hispanic Whites along the U.S.-Mexico Border and in the U.S.-Interior
(Dependent Variable = Natural Logarithm of Hourly Earnings)
Mexican Immigrants
Mexican Immigrants
& U.S.-Born Mexican
& U.S.-Born NonMexican
Characteristic
Americans
Hispanic Whites
Immigrants Only
U.S.-Mexico Border
MSA
-0.186***
(0.009)
-0.148***
(0.008)
-0.049***
(0.003)
Border x 2000IPUMS
0.035***
(0.012)
-0.012
(0.011)
0.0004
(0.005)
Mexican immigrant
along border
-----
-0.050***
(0.013)
-0.162***
(0.011)
Mex. imm. along
border x 2000IPUMS
-----
0.043***
(0.016)
0.002
(0.013)
Mexican immigrant
-----
-0.294***
(0.015)
-0.249***
(0.014)
Mex. imm. x
2000IPUMS
-----
-0.018
(0.018)
-0.026
(0.017)
0.026***
(0.002)
0.047***
(0.001)
0.093***
(0.0004)
Education x
2000IPUMS
-0.001
(0.002)
-0.005***
(0.002)
0.006***
(0.001)
Experience
0.016***
(0.002)
0.023***
(0.001)
0.030***
(0.0004)
Experience x
2000IPUMS
-0.007***
(0.003)
-0.007***
(0.002)
0.001*
(0.001)
Experience2/100
-0.026***
(0.003)
-0.031***
(0.003)
-0.042***
(0.001)
Experience2/100 x
2000IPUMS
0.012***
(0.004)
0.011***
(0.003)
0.003*
(0.001)
LEP
-0.137***
(0.011)
-0.104***
(0.010)
0.024**
(0.012)
0.005
(0.013)
-0.007
(0.013)
0.020
(0.014)
Years in U.S.
0.015***
(0.001)
0.012***
(0.001)
0.011***
(0.001)
Years in U.S. x
2000IPUMS
-0.003***
(0.001)
-0.003***
(0.001)
-0.001*
(0.001)
Female
-0.269***
(0.011)
-0.254***
(0.007)
-0.337***
(0.002)
Female x 2000IPUMS
0.028**
(0.013)
0.025***
(0.009)
0.051***
(0.002)
2000 IPUMS
0.406***
(0.040)
0.440***
(0.031)
0.191***
(0.010)
Education
LEP x 2000IPUMS
16
Table 2—Continued.
Characteristic
Mexican
Immigrants Only
Mexican Immigrants
& U.S.-Born Mexican
Americans
Mexican Immigrants
& U.S.-Born NonHispanic Whites
1.462
(0.033)
1.465***
(0.025)
0.926***
(0.007)
Constant
R2
.208
.237
.297
N
54,412
106,138
957,033
***, **, * Statistically significant at the one, five, or ten percent level.
Notes: The parentheses contain robust standard errors. These regressions use the IPUMS-provided sampling weights to maintain
the national representation of the sample. The samples include Mexican immigrants, U.S.-born Mexican Americans, and U.S.born monolingual-English non-Hispanic white workers employed for at least 20 hours per week for a minimum of 32 weeks in
the previous year, and who resided in a metropolitan statistical area.
17
Table 3: Selected Earnings Regression Results for Specific Border MSAs
(Dependent Variable = Natural Logarithm of Hourly Earnings)
Mexican Immigrants
Mexican Immigrants
& U.S.-Born
& U.S.-Born NonMexican
Mexican Americans
Hispanic Whites
Immigrants Only
Characteristic
El Paso, TX and Las
Cruces, NM
-0.283***
(0.014)
-0.157***
(0.011)
-0.190***
(0.010)
South Texas border MSA
-0.332***
(0.019)
-0.200***
(0.013)
-0.198***
(0.022)
Arizona border MSA
-0.191***
(0.023)
-0.072***
(0.016)
-0.184***
(0.007)
California border MSA
(San Diego)
-0.023***
(0.012)
0.103***
(0.013)
0.017***
(0.004)
El Paso, Las Cruces x
2000IPUMS
0.081***
(0.018)
0.009
(0.015)
0.007
(0.016)
South Texas border x
2000IPUMS
0.056**
(0.022)
0.020
(0.016)
0.022
(0.028)
Arizona border x
2000IPUMS
0.067**
(0.028)
-0.009
(0.021)
0.017*
(0.010)
California border x
2000IPUMS
-0.011
(0.015)
-0.031*
(0.013)
0.002
(0.005)
Mexican immigrant x El
Paso, Las Cruces
-----
-0.165***
(0.017)
-0.146***
(0.018)
Mexican immigrant x
South Texas border
-----
-0.148***
(0.022)
-0.116***
(0.030)
Mexican immigrant x
Arizona border
-----
-0.174***
(0.029)
-0.091***
(0.029)
Mexican immigrant x
California border
-----
-0.194***
(0.017)
-0.136***
(0.013)
Mex. imm. x El Paso, Las
Cruces x 2000IPUMS
-----
0.055**
(0.023)
0.026
(0.026)
Mex. imm. x S. Texas
border x 2000IPUMS
-----
0.011
(0.027)
-0.038
(0.037)
Mex. imm. x Arizona
border x 2000IPUMS
-----
0.065*
(0.035)
0.001
(0.033)
Mex. imm. x California
border x 2000IPUMS
-----
0.038*
(0.023)
-0.010
(0.017)
***, **, * Statistically significant at the one, five, or ten percent level.
Notes: The parentheses contain robust standard errors. These regressions use the IPUMS-provided sampling weights to maintain
the national representation of the sample. Other variables in these regressions include those listed in Table 2; the results for these
variables can be obtained from the authors. F-tests for the interactions between Mexican immigrants, the four border regions, and
2000IPUMS indicate that, as a group, these four terms are statistically significant at the five percent level when combining
Mexican immigrants and U.S.-born Mexican Americans, but are not statistically significant at conventional levels when
combining immigrants and U.S.-born non-Hispanic whites.
18
Table 4: Juhn-Murphy-Pierce Decomposition of Changes in the Mexican Immigrant/Non-Hispanic White
Wage Differential along the U.S.-Mexico Border and in the U.S.-Interior between 1990 and 2000
Change in the Wage Differential
between Mexican Immigrants &
U.S.-Born Mexican Americans
Change in the Wage Differential
between Mexican Immigrants &
U.S.-Born Non-Hispanic Whites
U.S.-Mexico
Border MSAs
U.S. Interior
MSAs
U.S.-Mexico
Border MSAs
U.S. Interior
MSAs
∆W2000 ≡ ln(W)N2000 - ln(W)M2000
0.260
0.313
0.625
0.541
∆W1990 ≡ ln(W)N2000 - ln(W)M2000
0.287
0.287
0.617
0.498
∆W2000 – ∆W1990
-0.027*
0.026*
0.008
0.043*
X-effect
-0.068
-0.026
-0.059
-0.027
B-effect
0.064
0.065
0.053
0.073
θ-effect
-0.024
-0.011
0.009
-0.005
σ-effect
-0.001
-0.001
0.005
0.002
Effects
* The change in the immigrant/native wage differential is statistically significant at the five-percent level based on t-tests while
employing the IPUMS-provided statistical weights.
Notes: Some of the total effects might not add up to the change in the wage differential because of rounding. The control
variables in the native earnings functions for each year (results available from the authors) include education, potential
experience, experience2, gender, limited-English-proficiency (for the Mexican American sample), and a constant term
19