A Dynamic Model of Self-Employment and Socioeconomic Mobility Among Return Migrants: The Case of Urban Mexico

Return migrants engage in high rates of self-employment, which scholars commonly attribute to the accumulation of financial and human capital while working abroad. Central to this scholarship is the assumption that self-employment is positive and leads to upward economic mobility among return migrants. This scholarship is limited, however, because it relies on large surveys and cross-sectional census data that treat self-employment as a single uni-dimensional status measured at one point in time. To improve conceptualization and measurement of self- employment, we engage three bodies of research that have thus far had little cross-fertilization: the literature on work and self-employment in Latin America, the scholarship on return migration and self-employment, and developments in economic theories of international migration. Drawing on results from the first longitudinal analysis of the labor market trajectories of Mexican return migrants in a large urban area in central Mexico, we identify three types of self-employment - survivalist, temporary, and prosperous. To explain these divergent self-employment pathways, we draw on biographical narratives and identify two sets of mechanisms - human capital formation and life-course stage. Overall, our investigation of self-employment types suggests a complex relationship between international migration experiences and the labor market mobility of return migrants which cannot be understood without taking into consideration migrants' social and economic circumstances before, during, and after migration. Consequently, our study yields insights into economic theories of international migration and provides direction for future research on return migration and labor market reintegration.