Trade and Wages: Two Puzzles from Mexico
AbstractMexico plays an important role in the developing-country trade-liberalisation literature because it liberalised early and extensively. Numerous papers analysed changes in Mexican wage levels and inequality after Mexico joined the GATT in 1986. This paper reviews recent papers that analyse changes in wage levels and inequality since the North American Free Trade Agreement in 1994. Two main puzzles emerge. First, wage growth rates are similar before and after NAFTA. Second, Mexican wage inequality, which received much attention after its post-GATT rise, falls steadily after NAFTA. This paper reviews several possible explanations for these two phenomena. Copyright 2007 The Author Journal compilation 2007 Blackwell Publishing Ltd .
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Volume (Year): 30 (2007)
Issue (Month): 9 (09)
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