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Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing

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Author Info
Revenga, Ana
Abstract

This article analyzes the effect of trade liberalization on employment and wages in the Mexican manufacturing sector. The study documents that many of the rents generated by trade protection were absorbed by workers in the form of a wage premium. Trade liberalization affected firm-level employment and wages by shifting down industry product and labor demand. This in itself may have accounted for a 3-4 percent decline in real wages on average. But trade reform also reduced the rents available to be captured by firms and workers. This had an additional negative effect on firm-level employment and wages. Copyright 1997 by University of Chicago Press.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 15 (1997)
Issue (Month): 3 (July)
Pages: S20-43
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Handle: RePEc:ucp:jlabec:v:15:y:1997:i:3:p:s20-43

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This page was last updated on 2009-11-21.

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