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Regional Labor Market Integration: Northern Mexico and Southern USA

Author

Listed:
  • Willy W. Cortez

    (Universidad de Guadalajara)

  • Alejandro Islas-Camargo

    (Instituto Tecnologico Autonomo de México)

Abstract

In this paper, the analysis of co-dependence between the US and Mexico labor markets is carried out by estimating the cyclical component of California’s and Texas’ manufacturing employment and four US Border Mexican cities through the Hodrick-Prescott filter. We estimated the smoothing parameter following a calibration technique proposed by Guerrero et al (2001) which allows us to obtain the best linear unbiased estimator of the trend component. Our analysis suggests that after 1994 there has been greater labor market integration between Mexico’s northern region and US’ southern region. This greater integration has implied a change in the nature of the short term relationship of manufacturing employment between Mexico and the US. The change is also significant on the relationship between Mexican real wages and US employment.

Suggested Citation

  • Willy W. Cortez & Alejandro Islas-Camargo, 2004. "Regional Labor Market Integration: Northern Mexico and Southern USA," Urban/Regional 0409011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpur:0409011
    Note: Type of Document - pdf; pages: 38. FDI and Labor Market Integration
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/urb/papers/0409/0409011.pdf
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    More about this item

    Keywords

    Labor Market Integration; US-Mexico border; Hodrick-Prescott filter;
    All these keywords.

    JEL classification:

    • J - Labor and Demographic Economics

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