The International Transmission of Local Economic Shocks Through Migrant Networks
Using newly validated data on geographic migration networks, we study how labor demand shocks in the United States propagate across the border with Mexico. We show that the large exogenous decline in US employment brought about by the Great Recession affected demographic and economic outcomes in Mexican communities that were highly connected to the most affected markets in the US. In the Mexican locations with strong initial ties to the hardest hit US migrant destinations, return migration increased, emigration decreased, and remittance receipt declined. These changes significantly increased local employment and hours worked, but wages were unaffected. Investment in durable goods and children's education also slowed in these communities. These findings document the effects in Mexico when potential migrants lose access to a strong US labor market, providing insight regarding the potential impacts of stricter US migration restrictions.
Published Versions
María Esther Caballero & Brian C. Cadena & Brian K. Kovak, 2023. "The international transmission of local economic shocks through migrant networks," Journal of International Economics, . citation courtesy of 
More from NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
