The Evolution of the Mexican Workforce in the United States

Wage convergence has been weaker on average for Mexican immigrants than for other immigrant groups.

The population of Mexican-born persons residing in the United States has increased at an unprecedented rate in recent decades. This increase can be attributed to both legal and illegal immigration. During the entire decade of the 1950s, only about 300,000 legal Mexican immigrants entered the United States, making up 12 percent of the immigrant flow. In the 1990s, 2.2 million Mexicans entered the United States legally, making up almost 25 percent of the legal flow, according to the U.S. Immigration and Naturalization Service.

In addition, there were seven million illegal aliens residing in the United States as of January 2000, with 4.8 million (68 percent) being of Mexican origin. As a result of the increase in the number of legal and illegal Mexican immigrants, nearly 9.2 million Mexican-born persons resided in the United States in 2000, comprising about 29.5 percent of the foreign-born population.

In The Evolution of the Mexican-Born Workforce in the United States (NBER Working Paper No. 11281), NBER Research Associates George Borjas and Lawrence Katz use data from 1900 through 2000 to document the evolution of the Mexican-born workforce in the U.S. labor market. While it is well known that there has been a rapid rise in Mexican immigration to the United States in recent years, they find that the share of Mexican immigrants in the U.S. workforce declined steadily after the 1920s before beginning to rise again in the 1960s. It was not until the 1970s that the relative number of Mexican immigrants in the U.S. workforce was back to the 1920s level.

Analyzing the economic performance of these immigrants throughout the twentieth century, the authors find that Mexican immigrants have much less education than either native-born workers or non-Mexican immigrants. These differences in what economists call "human capital" account for nearly three-quarters of the very large wage disadvantage suffered by Mexican immigrants in recent decades.

While the earnings of non-Mexican immigrants converge to approximate those of their native-born counterparts as the immigrants accumulate work experience in the U.S. labor market, the authors find that this wage convergence has been weaker on average for Mexican immigrants than for other immigrant groups. Although native-born workers of Mexican ancestry have levels of human capital and earnings that far exceed those of Mexican immigrants, the economic performance of these native-born workers lags behind that of native workers who are not of Mexican ancestry. Much of the wage gap between the two groups of native-born workers can be explained by the large difference in educational attainment between the two groups.

The authors also find that the large Mexican influx in recent decades has contributed to the widening of the U.S. wage structure by adversely affecting the earnings of less-educated native workers and improving the earnings of college graduates. These wage effects have, in turn, lowered the prices of non-traded goods and services that are low-skill labor intensive.

There is little evidence that the influx of Mexican-born workers into the United States is slowing down as we enter a new century, and there is also little evidence that the skill composition of the Mexican immigrants is changing from what it has been in the past. The continued migration of Mexican workers into the United States, and the inevitable rapid growth of the group of native-born workers of Mexican ancestry, suggest that the economic consequences of this migration influx are only beginning to be felt.

--Les Picker