International Migration Experience and Entrepreneurship: Evidence from Mexico

This study investigates the effect of international migration experience on entrepreneurship in sending areas. To identify prosperous businesses that create jobs and encourage economic development, this study isolates businesses other than street-vending enterprises with non-family employees. Retrospective life history data from the Mexican Migration Project (N = 11,789 persons & 146,372 person-years) was used to estimate the annual probability of becoming an entrepreneur across 170 Mexican communities between 1975-2017. This study found that (1) any prior migration experience increases the probability of entrepreneurial entry relative to non-migrants; (2) accumulated months of migration experience are positively associated with the probability of entrepreneurial entry; (3) undocumented status is associated with a lower probability of entrepreneurial entry. The positive effect of accumulated migration experience on entrepreneurship suggests that international migrants can accumulate human and financial resources that are essential to early stage entrepreneurship. Thus, entrepreneurship represents an important pathway through which international migration can encourage economic development in less developed regions. At the same time, the results suggest that that immigration policies in receiving countries can undercut migrants' capacities to mobilize resources and contribute to economic development upon return. These findings suggest that target migration creates a win-win by addressing labor shortages in receiving countries, while transferring resources to sending areas that enable economic mobility and development.