Self-Selection and Wage Consequences among Undocumented Central American Migrants in the United States - The Case of Nicaraguan, Guatemalan, and Salvadorian Migrants

Abstract: After the U.S. intervention, civil wars, and growing violence during the late 20th century, migration from the Central American countries to the U.S. increased rapidly in the 1980s, especially illegal migration. The Nicaraguan Adjustment and Central American Relief Act (NACARA) granted Nicaraguans permanent residency, while the others could apply “only” for asylum or were not even mentioned. In this study, I use household data from the Latin American Migration Project survey to analyze which factors encouraged U.S. migration in the first place, which factors stimulated illegal border crossing, and whether the illegal status of Central American migrants was related to U.S. wages. I investigate El Salvador, Guatemala, and Nicaragua together and then separately to compare them. Using descriptive and empirical analysis, I find a positive selection of highly educated Nicaraguans in the U.S. In contrast, lower but not non-educated Guatemalans and Salvadorians self-select into migration. Guatemalans with prior labor experience are likely to migrate legally into their first migration. Guatemalans with a high-skilled occupational position prior to their last migration are likely to migrate legally, while Salvadorians with a high-skilled previous job are much more likely to migrate illegally, possibly due to their disadvantaged treatment under NACARA. The next result of Guatemalan and Salvadorian migrants being more likely to have an illegal status compared to Nicaraguan migrants confirms this. I find no significant relationship between U.S. wages and illegal status, possibly due to few observations.