Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants

This paper presents an intergenerational model of self-selection of migration and education that is capable of explaining the evolution of earnings and education across three different generations of immigrants. By structurally estimating the model it is possible to quantify the human capital level of Mexicans in light of the self-sacrifice made by the first generation of Mexican immigrants. The results suggest that there is a significant one time loss of human capital faced by immigrants upon migration that is not transmitted to their children. Also parents with larger amounts of ability tend to migrate more and tend to choose to remain high school educated. However, given the better educational opportunities offered in the US, they migrate with the expectation of their children becoming college educated. Therefore, measures that rely on the earnings performance and educational attainment of immigrants underestimate the amount of human capital they bring into the host country.