The Bracero Program and Effects on Human Capital Investments in Mexico, 1942-1964

The Bracero Program was a massive guest worker program that allowed over four million Mexican workers to migrate legally and work temporarily in the United States from 1942 to 1964. This paper examines the development impacts of the program. Exploiting a natural experiment in the institutional history of the program, I use a state's proximity to the nearest recruitment center as an instrument for bracero out-migration. I estimate the causal effect of bracero migration on human capital investments in sending states, such as school enrollments, school provision, and education spending. IV estimates show that OLS estimates are negatively biased and that bracero migration caused increases in primary school enrollments and in education spending. Analysis of heterogeneous effects suggests that the effect occurred at the marginal years of education (i.e., latter parts of primary schooling and early secondary schooling) and that the effect was relatively larger for female children than for male children. The Bracero Program increased human capital investments in Mexico through positive income shocks, a change to household structure, imported ideas that fueled institutional change or some combination thereof