Economic Liberalization and Contemporary Determinants of Mexico's Internal Migration: An Application of Spatial Gravity Models

<title>Abstract</title>This paper examines the determinants of interstate migration flows in Mexico for the period between 1985 and 2005. The aim is to explore internal changes in the Mexican economy as a result of the impact of trade and financial liberalization to identify factors contributing to or deterring migration flows. Internal migration is modelled using extended spatial gravity models that are then properly estimated using Poisson estimation techniques. The findings suggest a structural break in terms of a reduction of interstate migration flows in the post-NAFTA period. The evidence suggests that much of this effect could be attributed to higher levels in the indicators of trade liberalization, which appear to also offset the expected effects of wage differentials.