Workers and Trade Liberalization: The Impact of Trade Reforms in Mexico on Wages and Employment
City University of New York, CUNY Queens College - Department of Economics ; National Bureau of Economic Research (NBER)
Industrial and Labor Relations Review, Vol. 55, No. 1, October 2001
Between 1986 and 1990, the Mexican government reduced tariffs and import license coverage by more than 50%. The author, using micro-level data, analyzes the impact of trade reform on Mexican wages and employment. Industries that had greater reductions in protection levels, she finds, had a larger percentage of low-skill workers. Wage dispersion increased in both the non-tradables sector and, to a much greater degree, the tradables sector. This pattern suggests that trade reform increased wage inequality. The decline in import license coverage appears to have reduced relative wages of workers in reformed industries by 2%, but did not affect relative employment. Reductions in tariffs had no statistically significant effect on relative wages or relative employment.
Keywords: Mexican wages, Mexican employment, Mexican trade liberalization, Mexican trade reform, trade reform, trade liberalization, trade and wages, trade and employment
JEL Classification: F0, F1, J0, J3Accepted Paper Series
Date posted: August 28, 2001
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