This week's Macroeconomic Seminar features Pawel Gola of Edinburgh University.

 

Pawel will discuss his paper: Mexican Migration to the United States:  Selection, Assignment, and Welfare (joint with Michał Burzyński).

Abstract:

This paper analyzes how migration policy reforms shape migrants’ self-selection and, through that, the distribution of wages in the sending and destination countries. First, we document that the distribution of wages among U.S. workers approximately dominates the distribution of wages among Mexican immigrants in the hazard rate order. Second, we show that if this condition holds, then the standard assignment model predicts that the average-wage-maximization and inequality-minimization goals of migration policy are in conflict: Any change in migration which leads to a worsening (improvement) of the overall distribution of wages raises (decreases) both the average wage and wage inequality among the natives. Finally, and most importantly, we develop and calibrate a two-country extension of the assignment model with endogenous migration, and use it to quantify the implications of migration policy reforms.