Is There a Premium on Experience in the U.S.?

Sarah Bohn, University of Maryland
Yyannu Cruz Aguayo, University of Maryland

The well-developed literature on immigration in the U.S. largely focuses on the well-being of immigrants and the effect of immigrants on natives. While important, these lines of inquiry ignore the fact that many immigrants return home. An estimated 25% to 40% of Mexican immigrants remigrated. A long run look at economic well-being of migrants necessitates the study not just of how immigrants do in the destination country, but also how immigrants fare when they return home. We ask: Do return migrants to Mexico benefit from a premium granted to U.S. experience in their home country? Exploiting the panel structure of the Mexican Health and Aging Study, we compare the economic well-being of the never-migrated to return migrants, attempting to correct for selection. Positive returns to U.S. experience may indicate optimal life-cycle decision-making by migrants, whereas negative or insignificant returns may indicate that migrants are misinformed about potential returns.