IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v106y2016i8p2046-85.html
   My bibliography  Save this article

Endogenous Skill Acquisition and Export Manufacturing in Mexico

Author

Listed:
  • David Atkin

Abstract

This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms (the years 1986 to 2000) altered the distribution of education. I use variation in the timing of factory openings across commuting zones to show that school drop-out increased with local expansions in export-manufacturing industries. The magnitudes I find suggest that for every 25 jobs created, one student dropped out of school at grade 9 rather than continuing through to grade 12. These effects are driven by less-skilled export-manufacturing jobs which raised the opportunity cost of schooling for students at the margin.

Suggested Citation

  • David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    • Handle: RePEc:aea:aecrev:v:106:y:2016:i:8:p:2046-85
    Note: DOI: 10.1257/aer.20120901
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/articles?id=10.1257/aer.20120901
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=YjLHPmskrmtdU-kM5dk-da34rS_KRvX7
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=wBj93rji41C9KHw771jorKcZ9e42D9zt
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=mRRrLDIt7UsMuNxP5s43SoWF-MzyifJm
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gordon H. Hanson & Ann Harrison, 2022. "Trade Liberalization And Wage Inequality In Mexico," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 3, pages 43-60, World Scientific Publishing Co. Pte. Ltd..
    2. Andrew B. Bernard & J. Bradford Jensen, 1995. "Exporters, Jobs, and Wages in U.S. Manufacturing: 1976-1987," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995 Micr), pages 67-119.
    3. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 489-530.
    4. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    5. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2006. "The Short- and Long-Term Career Effects of Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates," NBER Working Papers 12159, National Bureau of Economic Research, Inc.
    6. Oster, Emily & Steinberg, Bryce Millett, 2013. "Do IT service centers promote school enrollment? Evidence from India," Journal of Development Economics, Elsevier, vol. 104(C), pages 123-135.
    7. 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.
    8. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
    9. Robert Jensen, 2012. "Do Labor Market Opportunities Affect Young Women's Work and Family Decisions? Experimental Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(2), pages 753-792.
    10. Chesnokova, Tatyana & Krishna, Kala, 2009. "Skill acquisition, credit constraints, and trade," International Review of Economics & Finance, Elsevier, vol. 18(2), pages 227-238, March.
    11. Jim Airola & Chinhui Juhn, 2008. "Wage Inequality in Post-Reform Mexico," Journal of Income Distribution, Ad libros publications inc., vol. 17(1), pages 110-134, March.
    12. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    13. Federman Maya & Levine David I., 2005. "The Effects of Industrialization on Education and Youth Labor in Indonesia," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, February.
    14. Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 239-281, April.
    15. Oreopoulos, Philip, 2007. "Do dropouts drop out too soon? Wealth, health and happiness from compulsory schooling," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2213-2229, December.
    16. Wood, Adrian & Ridao-Cano, Cristobal, 1999. "Skill, Trade, and International Inequality," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 89-119, January.
    17. Emily Oster & M. Bryce Millett, 2010. "Do Call Centers Promote School Enrollment? Evidence from India," NBER Working Papers 15922, National Bureau of Economic Research, Inc.
    18. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2012. "The Short- and Long-Term Career Effects of Graduating in a Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 1-29, January.
    19. Anne Le Brun & Susan R. Helper & David I. Levine, 2011. "The Effect of Industrialization on Children’s Education. The Experience of Mexico," Review of Economics and Institutions, Università di Perugia, vol. 2(2).
    20. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
    21. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
    22. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    23. Nancy L. Stokey, 1991. "Human Capital, Product Quality, and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 587-616.
    24. Alessandro Nicita & Marcelo Olarreaga, 2007. "Trade, Production, and Protection Database, 1976--2004," The World Bank Economic Review, World Bank, vol. 21(1), pages 165-171.
    25. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    26. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
    27. Gauri Kartini Shastry, 2012. "Human Capital Response to Globalization: Education and Information Technology in India," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 287-330.
    28. Kaivan Munshi & Mark Rosenzweig, 2006. "Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy," American Economic Review, American Economic Association, vol. 96(4), pages 1225-1252, September.
    29. David McKenzie & Hillel Rapoport, 2011. "Can migration reduce educational attainment? Evidence from Mexico," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1331-1358, October.
    30. Claudia Goldin & Lawrence F. Katz, 1997. "Why the United States Led in Education: Lessons from Secondary School Expansion, 1910 to 1940," NBER Working Papers 6144, National Bureau of Economic Research, Inc.
    31. Lopez-Acevedo, Gladys, 2006. "Mexico : two decades of the evolution of education and inequality," Policy Research Working Paper Series 3919, The World Bank.
    32. 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.
    33. Badi H. Baltagi & Chihwa Kao, 2000. "Nonstationary Panels, Cointegration in Panels and Dynamic Panels: A Survey," Center for Policy Research Working Papers 16, Center for Policy Research, Maxwell School, Syracuse University.
    34. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lin, Faqin & Long, Cheryl X., 2020. "The impact of globalization on youth education: Empirical evidence from China's WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 820-839.
    2. Faqin Lin, 2022. "Agriculture exports, child labor and youth education: Evidence from 68 developing countries," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 490-513, May.
    3. Heath, Rachel & Mushfiq Mobarak, A., 2015. "Manufacturing growth and the lives of Bangladeshi women," Journal of Development Economics, Elsevier, vol. 115(C), pages 1-15.
    4. Blanchard, Emily J. & Olney, William W., 2017. "Globalization and human capital investment: Export composition drives educational attainment," Journal of International Economics, Elsevier, vol. 106(C), pages 165-183.
    5. Nina Pavcnik, 2017. "The Impact of Trade on Inequality in Developing Countries," NBER Working Papers 23878, National Bureau of Economic Research, Inc.
    6. Bosch, Mariano & Manacorda, Marco, 2008. "Minimum wages and earnings inequality in urban Mexico. Revisiting the evidence," LSE Research Online Documents on Economics 19561, London School of Economics and Political Science, LSE Library.
    7. Timothy Halliday & Daniel Lederman & Raymond Robertson, 2018. "Tracking wage inequality trends with prices and different trade models: evidence from Mexico," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(1), pages 47-73, February.
    8. Azam, Mehtabul, 2022. "Trade Liberalization and Human Capital Accumulation: Evidence from Indian Census," IZA Discussion Papers 15286, Institute of Labor Economics (IZA).
    9. Mariano Bosch & Marco Manacorda, 2010. "Minimum Wages and Earnings Inequality in Urban Mexico," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 128-149, October.
    10. Bai, Jie & Wang, Yukun, 2020. "Returns to work, child labor and schooling: The income vs. price effects," Journal of Development Economics, Elsevier, vol. 145(C).
    11. Mehta, Aashish & Mohr, Belinda Acuña, 2012. "Economic Liberalization and Rising College Premiums in Mexico: A Reinterpretation," World Development, Elsevier, vol. 40(9), pages 1908-1920.
    12. Li, Jie & Lu, Yi & Song, Hong & Xie, Huihua, 2019. "Long-term impact of trade liberalization on human capital formation," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 946-961.
    13. Raymundo M. Campos-Vazquez & Nora Lustig, 2017. "Labour income inequality in Mexico: Puzzles solved and unsolved," Working Papers 1719, Tulane University, Department of Economics.
    14. Facchini, Giovanni & Liu, Maggie Y. & Mayda, Anna Maria & Zhou, Minghai, 2019. "China's “Great Migration”: The impact of the reduction in trade policy uncertainty," Journal of International Economics, Elsevier, vol. 120(C), pages 126-144.
    15. Juhn, Chinhui & Ujhelyi, Gergely & Villegas-Sanchez, Carolina, 2014. "Men, women, and machines: How trade impacts gender inequality," Journal of Development Economics, Elsevier, vol. 106(C), pages 179-193.
    16. Gerardo Esquivel, 2011. "The Dynamics of Income Inequality in Mexico since NAFTA," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2011), pages 155-188, August.
    17. Majlesi, Kaveh, 2014. "Demand for Low-Skilled Labor and Parental Investment in Children's Education: Evidence from Mexico," Working Papers 2014:5, Lund University, Department of Economics.
    18. Li, Bingjing, 2018. "Export expansion, skill acquisition and industry specialization: evidence from china," Journal of International Economics, Elsevier, vol. 114(C), pages 346-361.
    19. Yao Pan & Jessica Leight, 2021. "Educational Responses to Migration-Augmented Export Shocks: Evidence from China," Working Papers 2021-14, The George Washington University, Institute for International Economic Policy.
    20. Gauri Kartini Shastry, 2012. "Human Capital Response to Globalization: Education and Information Technology in India," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 287-330.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:106:y:2016:i:8:p:2046-85. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.