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Using Panel Data to Estimate the Effect of the North American Free Trade Agreement on Employment and Wages at the State Level

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  • Mark Gius
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    Abstract

    I determine the effect of NAFTA on employment and wages in the United States. I use a panel-data set of 50 states for 1980-2000, and a two-stage least squares, fixed effects model. I estimate equations for employment and wages. Empirical results indicate that NAFTA had a negative effect on employment and a positive effect on wages. Chow Test results suggest that there is a break in both the employment and wage relationships in 1994, the year NAFTA became effective.

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    Bibliographic Info

    Article provided by New York State Economics Association (NYSEA) in its journal New York Economic Review.

    Volume (Year): 37 (2006)
    Issue (Month): 1 ()
    Pages: 20-31

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    Handle: RePEc:nye:nyervw:v:37:y:2006:i:1:p:20-31

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    1. Michael W. Klein & Scott Schuh & Robert K. Triest, 2003. "Job Creation, Job Destruction, and International Competition," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number jcjd.
    2. Willem Thorbecke & Christian Eigen-Zucchi, 2002. "Did NAFTA Cause a "Giant Sucking Sound"?," Journal of Labor Research, Transaction Publishers, vol. 23(4), pages 647-658, October.
    3. Michael W. Klein & Scott Schuh & Robert K. Triest, 2002. "Job creation, job destruction, and international competition: a literature review," Working Papers 02-7, Federal Reserve Bank of Boston.
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