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Skill premia in Mexico: demand and supply factors

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  • Gabriel Montes Rojas

Abstract

Skill premia trends for the Mexican urban labour market are analysed, decomposing into demand and supply factors. Moreover, among the former both between and within effects are studied, in line with the Katz and Murphy decomposition. It is shown that demand factors are more important for explaining the initial increment in skill premia, but supply factors are responsible for driving them down. It is concluded that the North American Trade Agreement (NAFTA) favours unskilled labour.

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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850500426145&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 14 ()
Pages: 917-924

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:14:p:917-924

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References

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  1. Francisco Galrao Carneiro & Jorge Saba Arbache, 2003. "Assessing the impacts of trade on poverty and inequality," Applied Economics Letters, Taylor and Francis Journals, vol. 10(15), pages 989-994.
  2. Arnaud Dupuy & Lex Borghans, 2005. "Supply and demand, allocation and wage inequality: an international comparison," Applied Economics, Taylor and Francis Journals, vol. 37(9), pages 1073-1088.
  3. Robertson, Raymond & Dutkowsky, Donald H., 2002. "Labor adjustment costs in a destination country: the case of Mexico," Journal of Development Economics, Elsevier, vol. 67(1), pages 29-54, February.
  4. Kang-Shik Choi & Jinook Jeong, 2005. "Technological change and wage premium in a small open economy: the case of Korea," Applied Economics, Taylor and Francis Journals, vol. 37(1), pages 119-131.
  5. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
  6. Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc.
  7. Cragg, Michael Ian & Epelbaum, Mario, 1996. "Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?," Journal of Development Economics, Elsevier, vol. 51(1), pages 99-116, October.
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Cited by:
  1. Gasparini, Leonardo & Galiani, Sebastián & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, Institute for the Study of Labor (IZA).
  2. Montes-Rojas, Gabriel & Santamaria, Mauricio, 2007. "Sources of productivity growth: Evidence from the Mexican manufacturing sector," The North American Journal of Economics and Finance, Elsevier, vol. 18(3), pages 263-278, December.

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