Evolving Demographic and Human-Capital Trends in Mexico and Central America and Their Implications for Regional Migration

Over the past half century, migration from Mexico and Central America to the United States has been driven in part by regional demographic and human-capital trends. As the U.S. labor force became better educated, fewer native workers accepted certain low-skilled jobs. These changes coincided with a population boom in Mexico and Central America. Economic growth there was unable to keep pace with demographic changes, and many of the region’s youth sought opportunities in an emerging low-skilled labor market in the United States.

Yet the demographic and human-capital profiles of Mexico and Central America are evolving rapidly. In Mexico and El Salvador, the demographic transition initiated decades ago is translating into slower population growth, declining youth numbers, and aging societies. However, population growth is expected to remain high in Guatemala and Honduras for several more decades. The region has made substantial progress in expanding access to education. Mexican students still lag behind U.S. students, and access to education and test scores lag even further in Central America.

U.S. unemployment and underemployment are approaching record levels, and labor force participation is rising among the elderly, youth, and other groups that compete with immigrants in the labor market. The baby boom generation’s retirement may also be postponed further than previously expected. Despite uncertainty regarding the durability of these trends, these changes mean policymakers can no longer rely on the conventional wisdom about regional labor mobility that has guided past decisions.