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Assessing Returns To Education And Labor Shocks In Mexican Regions After Nafta

Author

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  • André Varella Mollick
  • René Cabral

Abstract

type="main" xml:id="coep12063-abs-0001"> This article examines Mexico's (real) wage movements across its 32 subnational entities for post-North American Free Trade Agreement years. Employing dynamic panel data methods, we obtain the following results. First, education (or labor productivity) has slightly higher wage effects in the Border-North region. Second, allowing for foreign capital and labor to respond to wages, returns to education have higher effects in South-Center Mexico, the region with (average) lower education levels. Third, convergence rates become lower with endogenous foreign capital and migration flows: wages move faster in the South-Center region than in Border-North. Overall, migration flows have greater effects on wages than foreign direct investment inflows. (JEL F15, F21, F22, F43, O47)

Suggested Citation

  • André Varella Mollick & René Cabral, 2015. "Assessing Returns To Education And Labor Shocks In Mexican Regions After Nafta," Contemporary Economic Policy, Western Economic Association International, vol. 33(1), pages 190-206, January.
    • Handle: RePEc:bla:coecpo:v:33:y:2015:i:1:p:190-206
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    File URL: http://hdl.handle.net/10.1111/coep.2015.33.issue-1
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    Citations

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    Cited by:

    1. Carlos A. Ibarra, 2016. "Investment, asset market, and the relative unit labor cost in Mexico," Economic Change and Restructuring, Springer, vol. 49(4), pages 339-364, November.
    2. René Cabral & André Varella Mollick & Eduardo Saucedo, 2019. "Foreign Direct Investment In Mexico, Crime, And Economic Forces," Contemporary Economic Policy, Western Economic Association International, vol. 37(1), pages 68-85, January.
    3. René Cabral & André Varella Mollick & Eduardo Saucedo, 2016. "Violence in Mexico and its effects on labor productivity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(2), pages 317-339, March.
    4. Roberto Coronado & Eduardo Saucedo, 2019. "Drug-related violence in Mexico and its effects on employment," Empirical Economics, Springer, vol. 57(2), pages 653-681, August.
    5. Castellanos-Sosa, Francisco A. & Cabral, René & Mollick, André Varella, 2022. "Energy reform and energy consumption convergence in Mexico: A spatial approach," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 336-350.
    6. Cabral, René & Mollick, André Varella, 2017. "Mexican real wages and the U.S. economy," Economic Modelling, Elsevier, vol. 64(C), pages 141-152.
    7. Cabral Torres René & Mollick André V. & Saucedo Eduardo, 2018. "The Impact of Crime and Other Economic Forces on Mexico's Foreign Direct Investment Inflows," Working Papers 2018-24, Banco de México.
    8. Brock, Gregory & German-Soto, Vicente, 2017. "Regional industrial informality and efficiency in Mexico, 1990–2013," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 928-941.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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