The Bracero Program defined migration policy between the United States and Mexico for over two decades.  Lasting from 1942 until 1964, the Bracero Program allowed over four million Mexican agricultural workers to migrate legally, making it the largest guest worker program in the migration history of the United States.  Those that migrated under the Bracero Program brought money and ideas back home with them.  These positive income shocks and the exposure to good institutions abroad could potentially impact economic development in the communities from which these individuals came.

 In this paper I analyze the impact of the Bracero Program on economic development and public good provision in Mexico.  I examine whether or not bracero migration encouraged investments in education and human capital, both by households and by the states.  Specifically, I utilize a new, hand-collected dataset to analyze the causal effect of state-level bracero out-migration on various state-level education outcomes.  These outcomes include primary school enrollments, provision of primary schools, and education spending by state governments.

 The data come from two sources.  I use the international agreements signed between the United States and Mexico to trace the locations of the bracero recruitment centers in Mexico over the lifespan of the program.  Also, I collect state-level characteristics from the Anuarios Estadisticos de los Estados Unidos Mexicanos from the years 1942-1967.  These statistical yearbooks of administrative data were compiled by the national statistical agency in Mexico, the Instituto Nacional de Estadistica y Geografia (INEGI).

 A natural experiment in the institutional history of the Bracero Program provides the basis for an instrumental variables design.  I use the proximity of a state to the nearest recruitment center in a particular year as an instrument for the out-migration of braceros in that year.  In order to migrate as a bracero to the United States, the migrant needed first to travel to a recruitment center in Mexico.  Those closer to the centers would be more likely to become braceros.  The location of these recruitment centers in Mexico changed several times.  The actual location of the center at any point in time was the result of negotiations between federal officials in Mexico and the United States.  Changes in bargaining power determined these locations, with centers opening and closing throughout the life of the program.  The political factors governing the unique spatial and temporal pattern to the opening and closing of the centers are exogenous to economic conditions or other features that affect investments in human capital.

 Estimates suggest that bracero migration did cause significant increases in primary school enrollments as well as in education spending by the state government.  Thus, this paper shows that the Bracero Program increased human capital investments, both by individual households and by the states.  An understanding of this effect on the sending communities in Mexico will better illuminate the migration history between these two nations as well as provide a basis for evaluating the future use of guest worker programs as development policy.