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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.
