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Effects of manufacturing dynamics on returns to education in the North of Mexico

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  • Caamal Olvera, Cinthya G.

Abstract

This paper examines the pattern of the labor market appraisal of workers’ schooling, focusing on the Northern regions of the country. The manufacturing industry is studied in particular since a large part of the economic activity is located in the North, relative to the rest of the country’s regions. The change in the manufacturing industry has been affected by international shocks, trade agreement regulations and the entrance of stronger competitors with a supply of low-skill workers, such as Asian countries. Quantile estimation results show that the labor market valued less the additional years of education acquired by workers over the period from 1988 to 2011. Results show that workers at the lowest part of the distribution are the ones who seem to be most affected in terms of education investment by the decline of manufacturing activity in the Northern region.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 55211.

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Date of creation: Aug 2013
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Publication status: Published in Políticas Públicas 1.1(2013): pp. 43-57
Handle: RePEc:pra:mprapa:55211

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Keywords: manufacturing; returns to education; quantile regression; Northern regions;

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  1. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  2. Elisa Giuliani & Carlo Pietrobelli & Roberta Rabellotti, 2004. "Upgrading in global value chains: lessons from latin american clusters," Working Papers 72, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
  3. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-29, April.
  4. Omar Arias & Kevin F. Hallock & Walter Sosa Escudero, 1999. "Individual Heterogeneity in the Returns to Schooling: Instrumental Variables Quantile Regression using Twins Data," Department of Economics, Working Papers 016, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
  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. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  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.
  8. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
  9. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
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