March of Folly:

O n January 1, 1994, Mexico joined Canada and the United States in the North American Free Trade Agreement (NAFTA), creating a free trade zone stretching from the Guatemala border to the Arctic Ocean. Despite the continent-wide opening of capital, consumer, and commodity markets, however, NAFTA does not envision a parallel opening of labor markets. On the contrary, NAFTA was sold as a means of preventing labor migration from Mexico. According to former Mexican President Carlos Salinas de Gortari, through NAFTA Mexico sought "to export goods and not people."

In keeping with this sentiment, migration issues were largely excluded from the final agreement, leaving each country free to pursue its own immigration policy. Indeed, the United States has sought to restrict sharply the entry of Mexican workers. The 1986 Immigration Reform and Control Act (IRCA) sharply increased the border patrol's budget and imposed new sanctions against employers who hired undocumented workers. IRCA's passage was followed by highly publicized border crackdowns, first in El Paso ("Operation Hold the Line") and later in San Diego ("Operation Gatekeeper"), yielding a new militarization of the Mexico-U.S. border. Congress recently extended this crackdown along the entire frontier by authorizing the Immigration and Naturalization Service (INS) to hire 1,000 additional officers and 300 support personnel per year between 1996 and 2001, nearly doubling the border patrol. It also gave its agents broad new powers to remove undocumented aliens quickly, without judicial review.

In 1994, California's voters passed Proposition 187 by a wide margin. This initiative sought to bar undocumented migrants from public services such as schools, hospitals, and public assistance, and it attempted to enlist teachers, medical personnel, and welfare caseworkers as enforcers. These efforts went national in 1996 when Congress passed legislation that forbade noncitizen immigrants from receiving most means-tested federal and state benefits. Congress also raised the income threshold required to sponsor new immigrants and enacted harsh penalties against people who overstayed temporary visas. Even for those migrants legally entitled to become permanent resident aliens, the act imposed a fee of $1,000 for the privilege of adjusting status.

T hus the United States wants to have its cake and eat it too. On the one hand, it seeks to create a continent-wide free trade zone for goods, capital, and information. On the other hand, within this integrated North American market it wants no movement of labor. Rather, international migration is to be suppressed through police actions at the border and coercive internal sanctions.

Unfortunately this contradictory policy is backfiring. The consolidation of the North American market will promote, not preclude, emigration from Mexico. As trade relations expand, a continent-wide infrastructure of transportation and communication will facilitate circulation between the two countries, and an expanding network of interpersonal ties created through trade, tourism, education, and migration itself will lower the costs and risks of international movement—to put a U.S. job within easy reach of a growing fraction of the Mexican population. U.S. attempts to suppress the resulting migratory flows will not succeed; indeed, they will make matters worse, and in the end the United States will have the worst of all possible worlds: continued immigration accompanied by stagnant wages, declining labor standards, and a growing population of impoverished, unhealthy, and poorly educated Mexican Americans. In order to understand the reasoning behind this dire forecast, one first must understand the forces driving Mexico-U.S. migration.

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Most policymakers and citizens think Mexicans head north simply because wages are low in Mexico and high in the United States. Mexicans supposedly make a cost-benefit calculation that weighs the projected expenses and risks of moving against the expected returns from living and working in the United States. Since this balance is large and positive for most Mexicans, according to the theory, they rationally choose to move northward. The reality is more complicated. As part of an international committee I recently surveyed theories and research from around the world (to be published in the book Worlds in Motion: International Migration at Century's End) to identify the forces underlying contemporary international migration; and in a recent empirical study ("What's Driving Mexico-U.S. Migration?") I evaluated the various theoretical explanations for the specific case of Mexico-U.S. migration. Both exercises yielded the same conclusion: Wage differentials, by themselves, explain relatively little of the recent growth of international migration. Instead, the remarkable spread of immigration throughout the world has occurred through the operation of three fundamental forces: market consolidation, human capital formation, and social capital formation.

Neoclassical economics begins with the assumption that markets exist in nature. In reality, markets have to be constructed socially and culturally. The effective operation of markets not only requires building a physical infrastructure to support transportation and communication, but also a social infrastructure of organizations, institutions, and laws, as well as an ideational infrastructure of beliefs, values, and cultural practices. In the course of constructing an open market society, old structures are inevitably cast aside and new ones are created through a process that Joseph Schumpeter labeled "creative destruction." International migration originates in the social, economic, political, and psychological transformations that accompany the process of market creation and development.

As subsistence, command, or bureaucratic economic structures are replaced with market mechanisms, workers are displaced from their former livelihoods and thrown onto uncertain labor markets. Nascent entrepreneurs likewise do without well-developed capital or insurance markets, leaving them short of investment funds and without a satisfactory means of managing risks. Those entering the market as consumers, meanwhile, acquire new material aspirations but without the credit mechanisms that make mass consumption possible. All of this influences migration.

Economic insecurity and the desire to participate in the emerging market economy as workers, producers, and consumers lead households to search for new ways of self-insuring against risk and overcoming widespread failures in capital and credit markets. International migration offers households a means of achieving these goals. By sending a family member to the United States to work, households diversify their income sources to reduce risks to income. With one member working abroad, a period of unemployment at home need not threaten a household's material well-being, as the family can rely on foreign earnings until the local crisis passes.

I nternational migration is also attractive as a strategy for capital accumulation: Given higher wages in the country of destination, temporary labor migration offers a means of accumulating cash quickly, either for productive investment (irrigating a field, establishing a business, paying for schooling) or for financing the purchase of a high-cost consumer good (an appliance, a car, video/audio equipment, or housing). International migration, in short, does not stem from a lack of economic development, but from development itself. Immigrants tend not to come from poor, isolated communities disconnected from international markets, but from places undergoing rapid growth and development as a result of their entrance into emerging global trade, information, and production networks.

People displaced as a by-product of market formation have complex motivations that go beyond the simple cost-benefit calculations postulated under standard economic theory. Rather than seeking to settle abroad permanently to reap higher lifetime incomes, more often they seek to work abroad temporarily in order to enhance their status and economic well-being at home, leading to a high degree of circular movement and large return flows of capital in the form of migrant remittances.

No matter how it starts, once migration has begun it tends to perpetuate itself through two intertwined processes, one operating within individuals and the other through the social networks in which they are embedded. Once someone has migrated and returned, he or she is no longer the same person. The experience of work in an advanced industrial economy generates irreversible changes in individual motivations and personal attributes that make additional migration more likely. Satisfaction of the wants that originally led to migration creates new wants, and access to high wages and the goods they buy creates new standards of material well-being and instills new ambitions for upward mobility. As migrants grow accustomed to higher incomes, they alter their consumption patterns and adopt new styles of life that cannot easily be maintained through local labor, making additional trips necessary.

Along with shifting motivations, migrants acquire other forms of human capital—personal characteristics that make them more productive and increase their value to foreign employers. In the course of traveling and working abroad, migrants gain knowledge of the host country's language, employment practices, job routines, and ways of life. They learn how to enter the country legally or illegally, find jobs, and manage daily life in a foreign setting. As a result of this new knowledge—this new human capital—the costs and risks of taking an additional trip drop, while the potential benefits rise. The more someone migrates, the more he is likely to continue migrating and the longer he tends to stay, yielding a self-sustaining process of human capital accumulation that produces more trips of longer duration.

Each act of migration also creates social capital among those to whom the migrant is related: Once someone migrates, the costs and risks of international migration fall for that person's friends and relatives, inducing some of them to migrate, which further expands the network of people with ties to migrants, yielding more social capital, which induces new people to migrate, further expanding the network, and so on. The steady accumulation of social capital through the progressive expansion of interpersonal networks between migrants and nonmigrants yields a powerful feedback loop that results in what Gunnar Myrdal called the "cumulative causation" of migration over time.


Spurred on by the World Bank and the International Monetary Fund, and encouraged by the U.S. Treasury, Mexico in 1982 embarked on an ambitious program of neoliberal economic restructuring that opened the country to full participation in the global market economy. Abandoning its long-standing commitment to the development strategy of Import Substitution Industrialization (ISI), the Mexican government joined GATT, lowered tariffs, eliminated restrictions on foreign business ownership, reduced barriers to capital mobility, privatized state enterprises, downsized the state bureaucracy, and phased out subsidies to producers and consumers. It privatized the ownership of rural communal lands and offered new incentives to private agricultural producers.

These changes began during the presidency of Miguel de la Madrid Hurtado (1982-1988) but reached full fruition under that of Carlos Salinas de Gortari (1988-1994). Having set Mexico decisively on the road to a free market economy, President Salinas sought a means of institutionalizing his economic program and making it permanent. If free trade and an open economy could be locked into a treaty with the United States, it would be extremely difficult, if not impossible, for a later president, no matter what his views, to abandon the neoliberal economic model Salinas had established. NAFTA would create a direct U.S. financial and political interest in Mexico's free market reforms, and any Mexican president who acted unilaterally against U.S. financial and political interests could expect to pay a very high price at home and abroad.

In ratifying NAFTA, therefore, the United States was ratifying the free market economic model that President Salinas had implemented in Mexico; and if one approves of that economic model, then logically one also approves of the transformations that follow from it. In urban areas, workers have been shed in record numbers from government bureaucracies, state-owned firms, and private companies. In rural areas, privatization has brought a wave of land consolidation, mechanization, and a shift to capital-intensive production methods, all of which have worked to displace subsistence farmers and small landowners. As unemployment has risen and inflation has oscillated between extremes over the past decade, Mexicans have sought ways of managing risk. As households have entered the informal economy to bolster sagging incomes, they have looked for ways of securing needed investment capital; and as imported goods have flooded onto expanding consumer markets, Mexicans have demanded credit as never before.

The consolidation of Mexican markets under NAFTA, in short, unleashed precisely the sort of social, political, and economic transformations that have served as engines of international migration elsewhere in the world. The political economy established in North America under NAFTA has created pressing needs not simply for employment, but for risk management, capital, and credit—needs that Mexico is poorly equipped to meet domestically. At the same time, NAFTA has forged new pathways of transportation and communication to make transnational movement easier, faster, and cheaper, and the resulting exchanges of managers, government officials, students, tourists, and, inevitably, workers have created new interpersonal ties across the border to lower social and psychological distances. Is it any wonder that migration has proceeded apace?

w ith my colleague Kristin Espinosa, I recently undertook a series of in-depth statistical analyses to determine which individual, household, community, and national factors most strongly influenced undocumented Mexican migration to the United States. We began by measuring the effect of the various factors on the odds of taking an initial undocumented trip; then we considered their effects on the odds of taking an additional undocumented trip, given that at least one had already occurred; and finally we measured how the same factors influenced the odds of returning to Mexico, given prior entry into the United States. In none of these analyses did we find much evidence that undocumented Mexican migration was strongly influenced by the size of the Mexico-U.S. wage gap.

Although the likelihood of taking a first undocumented trip was correlated with the ratio of wages between the two countries, the relationship was weak, and when we considered repeat and return migration, we found no relationship at all. Neither the odds of taking an additional U.S. trip, nor the likelihood of returning from any given trip, were related statistically to the wage gain a Mexican man was likely to achieve by working in the United States, even though this ratio was often very large.

The potential benefits accruing to migrants from U.S. social services likewise did not seem to affect the decision to migrate. We found that expected values of U.S. welfare benefits and medical care were either unrelated or negatively related to the odds of taking a first undocumented trip. Although the expected value of public education did show a positive association with the likelihood of initial undocumented migration, the relationship was again weak and substantively unimportant.

When we considered repeat and return migration, moreover, we found that undocumented men who could expect to reap the greatest gains from U.S. welfare or public education were least likely to take additional trips, and none of the expected U.S. service benefits (either welfare, education, or medical care) had any discernible effect on the odds of returning to Mexico. Only one social benefit—U.S. medical care—played the role in migrant decisionmaking predicted by standard economics: Those with the greatest expected gain from U.S. medical services displayed a higher likelihood of taking repeated U.S. trips. On the whole, however, we found remarkably little support for the view that Mexicans' migratory decisions are based on simple cost-benefit calculations.

In contrast, we did uncover substantial evidence that migration originated in social and economic transformations associated with the emergence and expansion of markets. We found, for example, that undocumented migrants do not come from the poorest and most backward Mexican communities, but from those that are most dynamic and rapidly developing. The higher the wages in a person's community, and the higher the percentage of women employed in local manufacturing, the greater the probability of leaving on a first undocumented trip to the United States.

If Mexican men were basing their decision to migrate on a simple comparison of wages at home and abroad, we would expect higher wages in the home community to increase the relative likelihood of return migration. But economically dynamic communities characterized by high wages and greater industrialization also create an economic environment with new needs for capital and risk management. People in such places are more likely to become undocumented migrants, and when they leave they tend to stay away longer because the local economy provides them with more opportunities for productive investment and spending, and, hence, a greater need for consumer and investment capital, causing them to lengthen their stays in the United States in order to accumulate more cash before going back. It is not income that Mexicans seek in migrating to the United States, so much as capital and insurance.

If risk management and capital accumulation indeed predominate over income maximization in motivating Mexicans to leave for the North, then we would expect the flow of migrants between the two countries to be circular rather than one- way. According to estimates I have developed with Audrey Singer of the Carnegie Endowment for International Peace, 86 percent of all undocumented Mexican entries between 1965 and 1990 were offset by return trips. Even among legal Mexican immigrants, the immigration researchers Guillermina Jasso and Mark Rosenzweig estimate that the rate of return migration is very high, perhaps as much as 56 percent over an eight-year period.

If migrants are in fact seeking to accumulate capital and manage risk, then we would also expect migrants to repatriate most of their earnings rather than spend them in the United States, yielding a large flow of "migradollars" back to Mexico. Work I have done with Emilio Parrado suggests that migrants working in the United States repatriated more than $2 billion per year in the late 1980s, and the researchers Fernando Lozano and Judi McClellan estimate that the annual flow had reached $4 billion by the mid-1990s.

If capital accumulation is a primary goal of Mexican migrants, at least initially, then their decisions also should be shaped more by Mexican interest rates than relative wages, and that is precisely what Kristin Espinosa and I found. Variations in the probability of taking a first undocumented trip to the United States were very strongly and positively associated with fluctuations in the Mexican real interest rate. A high interest rate makes capital less accessible to Mexican households, giving them a strong incentive to send someone to the United States to acquire the funds necessary for investment and consumption. International migration, in other words, functions as the poor person's MasterCard.

For the same reason, the likelihood of return migration is strongly and positively connected to the rate of Mexican inflation. A high rate of inflation means that migrants with dollars can purchase assets cheaply in Mexico, giving them yet another incentive to head southward. Thus, rates of capital return and depreciation, not wages, appear to be the key macroeconomic factors determining the course of Mexico-U.S. migration. As these rates rise, circulation within the North American migration system accelerates as new migrants leave for the United States to gain access to the capital they cannot raise at home and established migrants return home to invest what they've saved while working abroad.

In sum, we find ample evidence that migration between Mexico and the United States is rooted in the ongoing process of market creation and consolidation now intensified in the North American continent under the terms of NAFTA. And the process is self-reinforcing. Among men with no prior U.S. experience, Espinosa and I found that the likelihood of undocumented migration in any given year averaged only 4 percent. Among those who had made at least one trip to the United States, however, the annual probability rose to 43 percent; and the probability of taking an additional U.S. trip rose with each trip thereafter and with each additional month of total U.S. experience.

Every time that someone migrates to the United States, social capital is created within the set of people to whom that person is related, raising the odds that one of them will migrate, thus creating more social capital that stimulates more migration. Espinosa and I estimated that for a young Mexican man with a migrant parent and two migrant brothers, and living in a community where 21 percent of the adults have been to the United States, the annual probability of taking an undocumented trip is 16 percent. If a young man aged 18 were to go through life subject to this annual probability of undocumented migration, the cumulative likelihood of leaving by age 23 would be 58 percent; by age 28 it would be 83 percent.


Thus, the forces initiating and sustaining migration between Mexico and the United States are not those that most policymakers and citizens imagine. Undocumented migration is not driven by the lure of high wages or generous social benefits in the United States, or by poverty and a lack of development in Mexico. Rather, migration is stimulated precisely by the neoliberal sort of economic growth and development that NAFTA was intended to encourage.

U.S. immigration policy, therefore, is formulated with total disregard for the forces actually responsible for Mexican migration to the United States. The end result is a contradictory melange of actions that, on balance, do more to encourage than discourage movement between the two countries. Although U.S. policies to discourage immigration are ultimately ineffective in deterring transnational movement, they are not without influence; but rather than reducing the flow of Mexican migrants, their principal effect is to drive the migration further underground, with deleterious consequences for the United States and, of course, the migrants themselves.

U.S. attempts at deterrence stem directly from the view of migration as a cost-benefit decision. Congress has sought to raise the costs of migration through several actions: by expanding the border patrol and giving it more resources; by increasing penalties for violating U.S. immigration law; by raising the fees associated with legal immigration; by capping the number of legal visas to create long waiting times; and by underfunding the non-enforcement operations of the INS to create delays and inefficiencies in becoming a legal immigrant or citizen. At the same time, Congress has tried to reduce the expected gains from undocumented migration by imposing sanctions on employers who knowingly hire illegal workers and by blocking the access of immigrants, both legal and illegal, to U.S. social services.

But the formidable array of punitive actions directed against Mexican immigrants has not worked. According to an evaluation conducted by the sociologist Frank Bean and an interdisciplinary team of colleagues for the U.S. Commission on Immigration Reform, the border patrol's "Operation Hold the Line" had little effect in deterring long-distance migrants from crossing through El Paso en route to points elsewhere in the United States: These people simply redirected their efforts to other locations along the 2,000-mile border. Mainly, the crackdown inconvenienced local residents, who found their daily commuting patterns disrupted—until they could make other arrangements, such as getting a legal border-crossing card or moving into El Paso permanently. Once across the border, moreover, undocumented migrants living and working in El Paso were actually less likely to be apprehended after the onset of the operation than before; and even the operation's minimal deterrent effect on local residents diminished as time went on.

Thomas Espenshade, professor of sociology at Princeton University, has analyzed monthly apprehension statistics compiled by the INS from 1977 through 1988 to assess the relationship between the risk of apprehension and the volume of undocumented migration. He found that the size of the undocumented flow was most strongly influenced by demographic and economic factors in Mexico and the United States, and that once these were controlled "the influence of perceived risks of apprehension all but disappear[ed]." In other words, the prospect of apprehension at the border had virtually no deterrent effect on undocumented migration.

In my own study with Kristin Espinosa, I found that a higher risk of apprehension at the border actually increased the likelihood that Mexicans would begin migrating to the United States and it decreased the odds of returning home. Border crackdowns have the perverse effect of inducing people to begin migrating for fear that conditions at the border will get even worse, and then inducing them to stay longer to avoid the hazards of crossing again.

When we measured the effect of employer sanctions, we found a positive effect on the odds of taking an initial undocumented trip and a negative influence on the odds of taking a subsequent trip, although once again both effects were trivial once other social and economic factors were held constant. Enactment of employer sanctions had no effect whatsoever on the odds of returning to Mexico. Thus, cutting immigrants off from U.S. social services will not induce them to return home; it will just make them poorer, sicker, and less educated.

A recent analysis I conducted with Audrey Singer suggests why border crackdowns are ineffective. Mexicans are able to turn their personal contacts and network connections into resources that facilitate successful passage across the border. We found that persons who were socially connected to others with U.S. experience were more likely to cross with guides, and that the use of guides strongly reduced the odds of capture on the first trip. On subsequent trips, migrants drew upon their own knowledge and experience to negotiate the border successfully, often serving as guides for others.

Given widespread access to migration-related human and social capital in Mexico, the probability of apprehension is relatively low and has, in fact, fallen in recent years, despite successive border crackdowns and steady increases in the border patrol's enforcement budget. Whereas the probability of arrest on any given attempt ranged from 35 percent to 40 percent in the early 1970s, by the early 1990s it had fallen to 15 percent to 20 percent per attempt, a 40-year low. Thus, access to social capital in the form of personal ties to current or former U.S. migrants, and to human capital in the form of migratory experience, has permitted Mexican migrants to circumvent the various barriers thrown up by the border patrol.

A t this point in the history of Mexico-U.S. migration, 55 years after the United States began recruiting "temporary" Mexican farm workers in large numbers, the accumulated stocks of human and social capital are quite substantial. My colleague Julie Phillips and I estimated that 20 percent of all Mexicans aged 15 to 64 had made at least one trip to the United States, and 41 percent of all household heads had done so. We likewise found that 60 percent of all Mexican household heads had at least one immediate family member with U.S. experience and 25 percent had an immediate family member living in the United States. Likewise, 67 percent had at least one member of their extended family with U.S. experience and 61 percent had an extended family member living north of the border. All told, 81 percent of Mexican household heads knew someone with U.S. experience, and 73 percent had some friend or relative living in the United States. Mexicans now have ample resources to facilitate international movement, and no policy enacted unilaterally by the United States can change this fundamental fact.

Although police actions at the border do not appear to deter migrants from entering the United States, they do discourage them from returning home. In their evaluation of "Operation Hold the Line," the Bean study group found that "illegal Mexican immigrants residing and working in El Paso find it more difficult as a result of the operation to visit friends and relatives in Mexico and then return to El Paso." Espinosa and I also found that higher apprehension probabilities lowered the odds of returning among both illegal and legal migrants. Likewise, in her analysis of the "cat-and-mouse game" at the border, Sherrie Kossoudji found that migrants compensated for earlier apprehensions by staying in the U.S. longer on later trips and by cutting the length of time spent in Mexico between trips.

In addition to beefing up border enforcement, the United States has moved steadily over the years to reduce the number of legal visas accessible to Mexican nationals, and paradoxically this policy has likewise served to lengthen the stay of Mexican immigrants in the United States. As of 1965 Mexicans could enter the United States legally without numerical restriction. In 1968, however, Congress included Mexico under a hemispheric quota of 120,000 immigrants, and in 1976 placed it under a country quota of 20,000. Finally, in 1978 the hemispheric ceiling was abolished to create a worldwide cap of 290,000, which was subsequently reduced to 270,000 in 1980. Each of these changes reduced the potential supply of visas to Mexicans during a period when the demand for entry was rising sharply.

This constriction in the supply of legal visas lowered the odds of documented migration and raised the likelihood of undocumented migration, of course. But the overall flow of migrants continued to grow as before, with the composition shifted from legal to illegal. Paradoxically, restricting the number of visas did significantly lower the odds of return migration. Granting a visa for "permanent residence" ironically permits migrants to circulate more freely between Mexico and the United States. With a green card, workers can return to Mexico secure in the knowledge that they can reenter the United States whenever the need arises, without incurring the hazards and risks of surreptitious border crossing.

In sum, restricting the number of visas and beefing up enforcement along the border have not succeeded in reducing the flow of undocumented Mexican migrants. These policies have simply transformed a heretofore circular movement into much more of a unidirectional flow. Migrants otherwise disposed to return have been given strong new incentives to remain north of the border to avoid the gauntlet erected at the border and, in the end, U.S. policies have increased the stock of undocumented Mexicans living in the United States, thus maximizing the long-term social and economic consequences of Mexican migration for U.S. society.

Employer sanctions likewise appear to have had perverse consequences. Following the implementation of sanctions in late 1986, U.S. employers—especially in agriculture—turned increasingly to subcontractors to avoid risks of prosecution. By working through a subcontractor, employers also escape the law's burdensome paperwork requirements (as they no longer have to verify the legal status of each and every worker they hire). In return for absorbing the risks of prosecution and the burdens of paperwork, subcontractors retain a share of the migrants' earnings as payment, reducing their net wages. The Immigration Reform and Control Act also appears to have induced new discrimination against immigrants in general and Hispanics in particular. Congress, of course, wanted employers to discriminate against undocumented workers by denying them employment. Rather than taking the time and trouble to identify undocumented migrants, however, employers appear simply to have begun discriminating against all foreign-looking workers; and rather than denying them jobs, as Congress intended, employers have lowered their wages to compensate for the new risks they face under IRCA.

There is already evidence that the wages of Mexican migrant workers have suffered because of IRCA. When Julie Phillips and I studied trends in the wages of Mexican workers, we found that before IRCA migrants without documents earned the same wages as those with them, and that the specific rate of pay was determined by a person's education, duration of U.S. experience, and English-language ability. After IRCA, however, undocumented Mexican mi grants earned wages 28 percent below those earned by documented migrants with similar characteristics, and ra ther than being determined by schooling, experience, and linguistic ability, wages were determined more by a person's social contacts. The post-IRCA wage penalties were especially severe in agriculture and among migrants hired through subcontractors.

Not only did wages fall in the wake of IRCA; work I have done with the sociologist Katharine Donato of Louisiana State University suggests that working conditions likewise deteriorated, with higher proportions of migrants earning wages below the legal minimum and working under irregular circumstances. Thus, the primary effect of IRCA's employer sanctions has not been to reduce undocumented migration, but to push the employment of Mexican migrants underground, yielding a new black market for immigrant labor.

The new underground economy created by IRCA may have had spillover effects on natives working in the same or closely related sectors. Whereas research conducted using the 1980 census (that is, before IRCA) found few effects of immigration on the wages or employment of natives, work done using the 1990 census (that is, after IRCA) uncovered significant negative effects on certain native groups. U.S. attempts to eliminate the lure of U.S. jobs through employer sanctions thus appear to have gone badly awry, contributing to the deterioration of wages at the lower end of the labor market and the exacerbation of income inequality in the United States.

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