Monday, June 29, 2020

The Wall: Construction reduces migration by up to 35% from non-border municipalities; disproportionately deters low-skilled migrants, & reduces the number of undocumented Mexicans in the US

Fenced Out: The Impact of Border Construction on US-Mexico Migration. Benjamin Feigenberg. American Economic Journal: Applied Economics 2020, 12(3): 106–139.

Abstract: This paper estimates the impact of the US-Mexico border fence on US-Mexico migration by exploiting variation in the timing and location of US government investment in fence construction. Using Mexican survey data and data I collected on fence construction, I find that construction in a municipality reduces migration by 27 percent for municipality residents and 15 percent for residents of adjacent municipalities. In addition, construction reduces migration by up to 35 percent from non-border municipalities. I also find that construction induces migrants to substitute toward alternative crossing locations, disproportionately deters low-skilled migrants, and reduces the number of undocumented Mexicans in the United States. (JEL J15, J24, J61, K37, O15)

VI. Conclusion
My analysis demonstrates that fence construction significantly reduces migration from Mexico to the United States. I find that there are spillover effects of construction, as border municipality residents are deterred by construction in both their home municipalities and in adjacent ones, and as migrants from the interior of Mexico adjust the crossing locations chosen based on fence construction patterns. Non-border municipality residents, especially those who historically relied on particularly low-cost crossing locations, are significantly less likely to migrate to the United States after the start of fence construction. I argue that these findings are not consistent with a model in which fence construction simply increases mean migration costs by increasing the expected distance that each migrant must travel to cross the border. I do not find that the stock of potentially undocumented Mexicans residing in the United States immediately responds to fence construction, but I do identify a significant decline in the stock of potentially undocumented Mexicans over a longer (six-year) horizon. Lastly, I show that border fence construction reduces the extent of negative selection of migrants based on both pre-migration earnings and educational attainment.  Evidence on dynamic selection patterns has important welfare implications for both sending and receiving communities and implies that lower-skilled prospective migrants experienced the largest increase in crossing costs in response to fence construction.

This paper raises several policy-relevant avenues for future research. I have shown that the deterrent effect of the fence is driven by its impact on those with lower earnings and lower educational attainment, and this compositional change may have implications for local economic activity. In ongoing research, I find that fence construction significantly reduces earnings of border municipality residents, seemingly due to the contraction of local migration-related economic activity. This negative impact on local economies may increase instability in a region that already represents a significant security threat to communities on both sides of the border.  In an era when international migration flows have motivated destination country governments to enact policies aimed at deterring migration by raising its cost, a greater research emphasis on the mechanisms and subpopulations driving estimated impacts (and the costs imposed on non-migrants) can help shed light on the efficacy of such efforts.

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