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In 1990, the relative wage (Wus/wMex) was equal to 4. In 2019, the relative wage was equal to 3. In 1990, 75,000 migrants arrived in
In 1990, the relative wage (Wus/wMex) was equal to 4. In 2019, the relative wage was equal to 3. In 1990, 75,000 migrants arrived in the US from Mexico; in 2019, 50,000 migrants arrived in the US from Mexico. Discuss whether or not each of the following could have contributed to the observed changes in the relative wage and level of migration. In order to make your argument, draw an ES-ID diagram showing the ES and ID curves in 1990 and 2019 under the assumption that the only thing that happened was the effect listed in each part. EXAMPLE: Greater education in Mexico. This would have shifted ES to the right and not affected ID. This would have led to a lower relative wage, as observed, but greater migration, which was not observed. a. Lower youth population growth in Mexico. b. Greater financial resources at the disposal of Mexicans. c. Lower population growth in the US. d. Invent a combination of effects that could have brought about the observed changes in the relative wage and level of migration. Explain carefully how this would work and show it in a diagram
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