IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v20y2011i4p449-465.html
   My bibliography  Save this article

North-South trade liberalization and returns to skill in the south: The case of Mexico

Author

Listed:
  • Gautam Hazarika
  • Rafael Otero

Abstract

This study examines the effect of North American Free Trade Agreement (NAFTA), an instance of North-South trade liberalization, on returns to skill in Mexico. Mexico is abundant in low-skill workers relative to the US and Canada, and so, by the Heckscher-Ohlin-Samuelson trade model, NAFTA ought to have raised the relative earnings of low-skill workers, that is, lowered returns to skill in Mexico. Analysis of Mexican labour micro-data yields the finding that while returns to skill in industries producing tradeables have risen, ceteris paribus, since Mexico embarked upon trade liberalization by joining the GATT in 1986, this rise was less pronounced by 1999 in industries liberalized relatively rapidly by NAFTA, launched in 1994, than in industries liberalized relatively slowly by this phased trade treaty. This is considered evidence of NAFTA holding back rise in returns to skill, since it is plausible such a dampening would have been more marked in industries more rapidly exposed to trade with Mexico's skill abundant northern neighbours. Hence, this study suggests trade with developed nations may lower returns to skill in developing nations.

Suggested Citation

  • Gautam Hazarika & Rafael Otero, 2011. "North-South trade liberalization and returns to skill in the south: The case of Mexico," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 20(4), pages 449-465.
    • Handle: RePEc:taf:jitecd:v:20:y:2011:i:4:p:449-465
    DOI: 10.1080/09638190903003028
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638190903003028
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638190903003028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caamal Olvera, Cinthya G., 2013. "Effects of manufacturing dynamics on returns to education in the North of Mexico," MPRA Paper 55211, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:20:y:2011:i:4:p:449-465. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.