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The Effects Of U.S.‐China Trade On Employment And Wages In The U.S.‐Mexico Border Region

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  • ALYSON C. MA
  • ROSSITZA B. WOOSTER

Abstract

This article investigates the impact of foreign competition from China on employment and wages in four U.S.‐Mexico Border counties: Santa Cruz, Arizona; San Diego, California; El Paso, Texas; and Webb, Texas. Using disaggregated industry‐level data between 1992 and 2006, we find that increased trade with China is associated with significantly lower county‐industry employment and wages. In contrast, and as expected, increased imports from Mexico are positively related to increased employment and wages in U.S.‐Mexico border counties. The results indicate that the U.S.‐Mexico supply‐chain relationship related to the maquiladora industry is significantly affected by Chinese competition. Implications for policy include an increased focus on federal programs that are intended to diversify the border economy. (JEL F13, F43, F23)

Suggested Citation

  • Alyson C. Ma & Rossitza B. Wooster, 2009. "The Effects Of U.S.‐China Trade On Employment And Wages In The U.S.‐Mexico Border Region," Contemporary Economic Policy, Western Economic Association International, vol. 27(3), pages 335-348, July.
    • Handle: RePEc:bla:coecpo:v:27:y:2009:i:3:p:335-348
    DOI: 10.1111/j.1465-7287.2008.00140.x
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    References listed on IDEAS

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    1. Mollick, Andre Varella & Wvalle-Vazquez, Karina, 2006. "Chinese competition and its effects on Mexican maquiladoras," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 130-145, March.
    2. Robertson, Raymond, 2003. "Exchange rates and relative wages: evidence from Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 25-48, March.
    3. Lucinda Vargas, 2001. "Maquiladoras: impact on Texas border cities," Monograph, Federal Reserve Bank of Dallas, number 2001iotb.
    4. Marie T. Mora & Alberto Dávila, 2006. "Mexican Immigrant Self‐Employment Along the U.S.‐Mexico Border: An Analysis of 2000 Census Data," Social Science Quarterly, Southwestern Social Science Association, vol. 87(1), pages 91-109, March.
    5. Smith, Barton & Newman, Robert J, 1977. "Depressed Wages along the U.S.-Mexico Border: An Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 15(1), pages 51-66, January.
    6. Ana L. Revenga, 1992. "Exporting Jobs?The Impact of Import Competition on Employment and Wages in U. S. Manufacturing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 255-284.
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    Cited by:

    1. Jesús Cañas & Roberto Coronado & Robert W. Gilmer & Eduardo Saucedo, 2013. "The Impact of the Maquiladora Industry on U.S. Border Cities," Growth and Change, Wiley Blackwell, vol. 44(3), pages 415-442, September.
    2. Raymond Robertson & Timothy J. Halliday & Sindhu Vasireddy, 2020. "Labour market adjustment to third‐party competition: Evidence from Mexico," The World Economy, Wiley Blackwell, vol. 43(7), pages 1977-2006, July.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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