observation indicating the number of individuals in the national population represented and is used in all regressions.

The US census data were collected for the year 1999 while the surveys were in the 1990s and early 2000s (only India’s survey was carried out in 1999). We convert each wage estimate in current year local currency to current year US dollars at Purchasing Power Parity using factors from the World Bank (2007) and then deflate these dollar amounts to 1999 PPP US dollars using the PPP factor deflator.<sup>9</sup> To the extent that real wages rose (or fell) relative to the US between 1999 and the year of a country’s survey, the wage ratios for those countries will be slightly under (or over) estimated. Converting to PPP also naturally introduces the possibility that errors in any given country’s PPP calculation could affect the results; note, however, that each of the 42 wage ratios we calculate is independent of any data from the 41 other countries. Thus any error in any one country’s PPP rate does not propagate to the other estimates.

By using PPP exchange rates we assume that all consumption of the wage gain occurs in the US, which substantially understates the gains to overall earnings for migrant families, in two ways. First, this ignores remittances. If a worker is in one country with nuclear family members in another, and if we assume a unitary household utility function, then _household_ consumption should be deflated in the location where consumption occurs. This suggests at the least that all remittances should enter the analysis at sending country prices (official exchange rates), not PPP. Second, migrants, and especially temporary workers, should optimally have very high savings rates. A simple model of intertemporal consumption smoothing would suggest that if a worker had access to a much higher wage rate for an explicitly temporary period they should optimally smooth these windfall gains over his or her lifetime. Alternatively, temporary migration is often modeled as driven by “target savers” who accumulate savings for a specific purpose (e.g. a house, business, car, wedding/marriage), consumption that again would occur in their country of origin. Much, perhaps most consumption of the US earnings of temporary migrants would be in their own country, not the US.

For instance, take our median country, Bolivia. The ratio of official exchange rate (5.81 LCU/$) to PPP (2.09 LCU/PPP$) in 1999 was 2.78. Assuming all consumption occurs in the US produces a wage ratio for our base case observably identical worker of 4 at PPP. If one assumes that half of consumption is in Bolivia the ratio would be 7.5 and if only 20 percent of consumption were in the US (a combination of remittances and very high propensity to save) the ratio would be 9.7. The mean ratio of official to PPP exchange rates for countries with GDP per capita under PPP $10,000 in 1999 was 3.7 (larger than Bolivia’s). At this ratio of official to PPP exchange rates even if only 20 percent of migrant worker earnings in the US were consumed (through remittances of savings) in their home country this would mean our estimates were _understated_ by a factor of 1.5 and if as much as 50 percent were consumed in their home country the PPP comparisons

> 9 After we carried out our analysis the World Bank announced intentions to retroactively adjust the PPP factors we use, but these were unavailable at the time of writing. We note, however, that the most important adjustments foreseen are those to India’s and China’s PPP factors, both of which will tend to lower the PPP dollar-value of non-migrants’ earnings and therefore make the wage ratios reported here tend to underestimate the true ratios.

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