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Labor Market and Immigration Behavior of Middle-Aged and Elderly Mexicans

Authors

Abstract

In this study we analyzed the retirement behavior of Mexicans with migration spells to the United States that returned to Mexico and non-migrants. Our analysis is based on rich panel data from the Mexican Health and Aging Study (MHAS). Approximately 9 percent of MHAS respondents aged 50 and older reported having lived or worked in the United States. These return migrants were more likely to be working at older ages than non-migrants. Consistent with much of the prior research on retirement in the United States and other developed countries, Mexican non-migrants and return migrants were responsive to institutional incentives. Both groups were more likely to retire if they had publicly provided health insurance and pensions. In addition, receipt of U.S. Social Security benefits increased retirement rates among return migrants. Return migrants were more likely to report being in poor health and this also increased the likelihood of retiring. The 2004 draft of an Agreement on Social Security would coordinate benefits across United States and Mexico boundaries to protect the benefits of persons who have worked in foreign countries. The agreement would likely increase the number of authorized and unauthorized Mexican workers and family member eligible for Social Security benefits. The
responsiveness of current, older Mexican return migrants to pension benefits, suggests that an Agreement would affect the retirement behavior of Mexican migrants.

Key Findings

  • Compared to short-term, long-term Mexican migrants to the US are more likely to have US Social Security benefits and are less likely to have Mexican Social Security benefits and public health insurance coverage.
  • Receipt of U.S. Social Security benefits increases retirement rates among return migrants.  Return migrants are more likely to report being in poor health than non-migrants and this also increases the likelihood of retiring.
  • A Social Security Agreement between the US and Mexico would likely have important implications for retirement behavior.

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Project

Paper ID

WP 2008-192

Publication Type

Working Paper

Publication Year

2008