| Abstract: | This study uses U.S. census data from the year 2000 to analyze the earnings of Mexican immigrants along the U.S.‐Mexico border while accounting for the location in which they work. The empirical results indicate that Mexican entrepreneurs who live in U.S.‐border cities but primarily operate in Mexico accrue a significant earnings premium over their entrepreneurial and salaried counterparts working on the U.S. side of the border, even after controlling for differences in observable characteristics. This work‐location earnings gap widens when focusing on Mexican business owners lacking U.S. citizenship. It follows that policies which reduce trade and labor flows across the U.S.‐Mexico border may inadvertently dampen the entrepreneurial activities of foreign‐born residents in U.S.‐border cities. |
