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Trade and Occupational Employment in Mexico since NAFTA

Author

Listed:
  • Raymundo Miguel Campos-Vázquez

    (Center for Economic Studies, El Colegio de México)

  • José Antonio Rodríguez-López

    (University of California)

Abstract

We analyze the effects of trade liberalization on Mexican employment at an occupational level for the period from 1992 to 2009, ranking occupations by skill level. We find that the reduction in trade costs associated with Mexico's entry to NAFTA is related to larger employment expansions in low-skill occupations. This evidence runs counter to a story of skilled-biased technological change in Mexico, and in favour of a heterogeneous-firm model of trade in tasks where the offshoring cost of an occupation is positively related to its skill level. After NAFTA, labour demand for unskilled workers has increased and labour demand for skilled workers has been stagnant, even though supply of skilled workers has increased in the last 20 years. We provide intuitive evidence to identify a number of relevant bottlenecks in the Mexican economy that may be associated with these developments.

Suggested Citation

  • Raymundo Miguel Campos-Vázquez & José Antonio Rodríguez-López, 2011. "Trade and Occupational Employment in Mexico since NAFTA," OECD Trade Policy Papers 129, OECD Publishing.
    • Handle: RePEc:oec:traaab:129-en
    DOI: 10.1787/5kg3nh5q7p5k-en
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    Citations

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    Cited by:

    1. Jaime DE MELO & Julie REGOLO, 2013. "Labor Markets in Regional Trade Agreements: What Do We Know ?," Working Papers P69, FERDI.
    2. Selwaness, Irène & Zaki, Chahir, 2019. "On the interaction between exports and labor market regulation: Evidence from the MENA countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 73(C), pages 24-33.
    3. Karim Panahi & Monireh Dizaji & Arash Ketabforoush Badri, 2018. "The Role of the Agricultural Sector in Achieving Economic Development," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 3(11), pages 124-132, November.
    4. Mendez, Oscar, 2015. "The effect of Chinese import competition on Mexican local labor markets," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 364-380.
    5. John C. Anyanwu, 2014. "Does Intra‐African Trade Reduce Youth Unemployment in Africa?," African Development Review, African Development Bank, vol. 26(2), pages 286-309, June.

    More about this item

    Keywords

    employment; inclusive growth; trade; wages;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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