Emigration Effect on Wage

We have recently looked at the impact that immigration has on the home countries wage as well as employment. I have decided to look at the other side of things and see what the effect of emigration on the home country is. I found an empirical study done by P. Misrha that discusses this in great detail as it analyzes the effects on the wage in Mexico due to emigration to the United States.  They concluded that there is a strong positive correlation between emigration and wage in Mexico. This is further dug into and examined by schooling group. The conclusion of this was that a 10% decrease in the supply of labor due to emigration lead to a 4% increase in the wage for that specific schooling group. Emigration that occurred between 1970 and 2000 increased the average wage in Mexico by 8%. With the largest impact being on the high school graduates’ group, whose wage increases by 15% after controlling for other variables. It then goes into talk about the census in Mexico from 1990 to 2000. This census indicated that where the impact on citizens with some college education was double that of people with only a high school education. Misrha then suggests the increased emigration is leading to a larger and larger wage gap in developing countries. This is a rather interesting suggestion and something that could be very bad for Mexico in the short run. We can see that obviously emigration is helping those of higher education much more than those of the lower class. So, indeed the wage gap is widening as emigration is increasing.
As we have talked about in class, the effects of immigration to the United States are positive in the long run especially for the United States. When thinking about purely the benefits on wage in Mexico, they are benefiting from emigration as well. So, you would think that there is no downfall. However, as they are emigrating the wage gap is widening in Mexico. This increasing wage gap is then leading to decreased overall welfare for those in the lower classes. The faster growing wage for those with education makes sense as those with higher education in developing country are harder to find so the amount that they make will grow to attract more talent.  When thinking about this in terms of the Ricardian Model where labor is immobile we can see that because the citizens of Mexico are unable to switch industries in the short run, the overall welfare of the lower class will drop.