Is Mexico A Lumpy Country?
Abstract
Mexico's experience before and after trade liberalization presents a challenge to neoclassical trade theory. Though labor abundant, it nevertheless exported skill-intensive goods and protected labor-intensive sectors prior to liberalization. Post-liberalization, the relative wage of skilled workers rose. Courant and Deardorff (1992) have shown theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage. We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries. This heterogeneity helps to both undermine Mexico's aggregate labor abundance and motivate behavior that is more consistent with relative skill abundance.Download Info
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10898.Length:
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:nbr:nberwo:10898
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Keywords:Other versions of this item:
- Andrew B. Bernard & Raymond Robertson & Peter K. Schott, 2010. "Is Mexico a Lumpy Country?," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 937-950, November.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-22 (All new papers)
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Pol Antras & Luis Garicano & Esteban Rossi-Hansberg, 2005.
"Offshoring in a Knowledge Economy,"
Harvard Institute of Economic Research Working Papers
2067, Harvard - Institute of Economic Research.
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