Labor Migration between Developing Countries: The Case of Paraguay and Argentina

Abstract

Despite the historical and numerical importance of international migration between Paraguay and Argentina, the socioeconomic forces affecting the dynamics of the flow remain largely unexplored. This article contributes to the understanding of migration movements between the Latin American countries by analyzing patterns of labor migration from two Paraguayan communities to Argentina. The analysis separates the process of migration into four segments representing different migration decisions that Paraguayan men face throughout their life course: first trip, first return, recurrent trips, and duration of additional trips. Results confirm that Paraguayan migration to Argentina is closely related to individual characteristics and wealth, the extent of migrant networks and experience, and changes in macroeconomic conditions. The relative importance of these factors on migration varies depending on the aspect of migration under consideration. More generally, the analysis shows that unlike migration between Mexico and the United States, Paraguayan migrants to Argentina tend to be positively selected with respect to educational attainment and skills. This reflects the higher transferability of skills between the two countries and the absence of large urban centers attracting internal migrants in Paraguay. In addition, results show that migration between Paraguay and Argentina is very responsive to fluctuations in macroeconomic conditions, particularly income differentials and peso over-valuation. Government policies oriented towards the regulation of migration flows in the Southern Cone should pay closer attention to the impact of macroeconomic fluctuations on migration decisions, especially in the context of the Mercosur agreement.