What happened to the wages of Mexican immigrants? Trends and interpretations

Abstract

Over the past several decades the wages earned by Mexican immigrants stagnated relative to those earned by native Mexican Americans and non-Hispanic whites. In this article we draw on data from the decennial census and American Community Survey to understand why and how this stagnation occurred. We test two competing explanations: a decline in the quality of successive cohorts of Mexican immigrants and a shift in the political economy that increased the number of people lacking full labor rights in the United States while increasing discrimination and exclusion against such people. We present evidence in favor of the latter explanation by showing that observed quality increased rather than decreased and that what happened instead was a systematic decline in the returns to various measures of human capital and a wholesale drop in wages for all immigrants after 2000.