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Mexican real wages and the U.S. economy

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  • Cabral, René
  • Mollick, André Varella

Abstract

This article examines real wage determinants from 1996 to 2014 across Mexican states. Real wages are determined in equilibrium by combining labor supply (years of education and population growth) and labor demand (mostly external factors) forces. Panel data models provide two main results. First, years of education and U.S. real GDP appear to be reliable predictors of wages in fixed effects models, with very marked changes after the U.S. 2008–2009 financial crisis and stronger effects on northern Mexican states. Second, dynamic panels confirm the role of foreign forces: positive from the U.S. economy and negative from the real exchange rate.

Suggested Citation

  • Cabral, René & Mollick, André Varella, 2017. "Mexican real wages and the U.S. economy," Economic Modelling, Elsevier, vol. 64(C), pages 141-152.
    • Handle: RePEc:eee:ecmode:v:64:y:2017:i:c:p:141-152
    DOI: 10.1016/j.econmod.2017.03.013
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    2. 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.
    3. Juan Gabriel Brida & W. Adrian Risso & Edgar J. Sánchez Carrera & Verónica Segarra, 2021. "Growth and inequality in the Mexican states: Regimes, thresholds, and traps," Papers in Regional Science, Wiley Blackwell, vol. 100(5), pages 1295-1322, October.

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    More about this item

    Keywords

    Mexico; Panel data; Real wages; United States;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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