Looking for Local Labor Market Effects of NAFTA

49 Pages Posted: 22 Nov 2010

See all articles by John McLaren

John McLaren

University of Virginia; NBER

Shushanik Hakobyan

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2010

Abstract

Using US Census data for 1990-2000, we estimate effects of NAFTA on US wages. We look for effects of the agreement by industry and by geography, measuring each industry's vulnerability to Mexican imports, and each locality's dependance on vulnerable industries. We find evidence of both effects, dramatically lowering wage growth for blue-collar workers in the most affected industries and localities (even for service-sector workers in affected localities). These distributional effects are much larger than aggregate welfare effects estimated by other authors. In addition, we find strong evidence of anticipatory adjustment in places whose protection was expected to fall but had not yet fallen; this adjustment appears to have conferred an anticipatory rent to workers in those locations.

Suggested Citation

McLaren, John and Hakobyan, Shushanik, Looking for Local Labor Market Effects of NAFTA (November 2010). NBER Working Paper No. w16535. Available at SSRN: https://ssrn.com/abstract=1711675

John McLaren (Contact Author)

University of Virginia ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States
434-924-3994 (Phone)
434-982-2904 (Fax)

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Shushanik Hakobyan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
36
Abstract Views
704
PlumX Metrics