Chinese Trade Competition and Rural Mexican Migration

ABSTRACT

China's accession to the World Trade Organization in 2001 reshaped global trade, reducing U.S. demand for Mexican manufactured goods and weakening Mexico's manufacturing employment. This study estimates how this trade‐induced decline affected migration and employment decisions among rural Mexicans. Using individual‐level panel data from the Mexican National Rural Household Survey (ENHRUM) and a long‐difference framework, we instrument manufacturing employment with regional exposure to Chinese import competition. Results show that a 10‐percentage‐point decline in manufacturing employment increased the probability of U.S. migration by 24 percentage points and U.S. nonagricultural employment by 17 points, with no significant effects on agricultural employment.