Aspects of Labor Force Mobility in Latin America

Migration is an investment that man makes in himself, and it is possible to estimate the rate of return to that investment, at least in part, by measuring income differentials of migrants due to moving from one location to another. This study estimates pecuniary rates of return to migrants between Colombia and Mexico, by age at migration, and number of years of formal schooling of the migrants. The analysis shows not only that rates of return to migration between Latin American countries may be high, but also that these rates can be estimated with a limited amount of information about income earners in each country. The implications of the high rates for free labor movement in a Latin American Common Market, however, must be framed by constraints of expected shortages of skilled labor, in all Latin American countries and a general commitment by Latin American governments to redistribute income from capital to labor, protecting all levels of skills from immigration.