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Wages and productivity in Mexican manufacturing

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  • Lopez-Acevedo, Gladys
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    Abstract

    The author identifies the determinants of wages and productivity in Mexico over time using national representative linked employer-employee databases from the manufacturing sector. She shows that both employers and employees are benefiting from investments in education, training, work experience, foreign research and development, and openness after the North American Free Trade Agreement (NAFTA). Additional years of schooling have a higher impact on wages and productivity after NAFTA than before. Endogenous training effects are larger for productivity than for wages, suggesting that the employers share the costs and returns to training. The author also finds that investment in human capital magnifies technology-driven productivity gains. By comparing four regions of Mexico-north, center, south, and Mexico City-regional wage and productivity gaps are found to have increased over time.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2964.

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    Date of creation: 31 Jan 2003
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    Handle: RePEc:wbk:wbrwps:2964

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    Related research

    Keywords: Poverty Impact Evaluation; Economic Theory&Research; Environmental Economics&Policies; Labor Policies; Banks&Banking Reform; Economic Theory&Research; Environmental Economics&Policies; Banks&Banking Reform; Poverty Impact Evaluation; Municipal Financial Management;

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    1. repec:fth:coluec:455 is not listed on IDEAS
    2. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    3. Charles Brown & James L. Medoff, 1989. "The Employer Size-Wage Effect," NBER Working Papers 2870, National Bureau of Economic Research, Inc.
    4. Barrett, Alan & O'Connell, Philip J., 1999. "Does Training Generally Work? The Returns to In-Company Training," IZA Discussion Papers 51, Institute for the Study of Labor (IZA).
    5. Jacob Mincer, 1989. "Human Capital Responses to Technological Change in the Labor Market," NBER Working Papers 3207, National Bureau of Economic Research, Inc.
    6. Dearden, Lorraine & Reed, Howard & Van Reenen, John, 2000. "Who Gains when Workers Train? Training and Corporate Productivity in a Panel of British Industries," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2486, C.E.P.R. Discussion Papers.
    7. Sargent, John & Matthews, Linda, 1997. "Skill development and integrated manufacturing in Mexico," World Development, Elsevier, Elsevier, vol. 25(10), pages 1669-1681, October.
    8. Oosterbeek, Hessel & van Praag, Mirjam, 1995. " Firm-Size Wage Differentials in the Netherlands," Small Business Economics, Springer, Springer, vol. 7(3), pages 173-82, June.
    9. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    10. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 253-90, February.
    11. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, Econometric Society, vol. 69(5), pages 1127-60, September.
    12. Rosholm, Michael & Nielsen, Helena Skyt & Dabalen, Andrew, 2007. "Evaluation of training in African enterprises," Journal of Development Economics, Elsevier, Elsevier, vol. 84(1), pages 310-329, September.
    13. Verner, Dorte, 1999. "Are wages and productivity in Zimbabwe affected by human capital investment and international trade?," Policy Research Working Paper Series 2101, The World Bank.
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    Cited by:
    1. Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers, The Research Institute of the Finnish Economy 1105, The Research Institute of the Finnish Economy.

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