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Wage Shocks and North American Labor-Market Integration

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  • Raymond Robertson

Abstract

This study uses household-level data from the United States and Mexico to examine labor-market integration. I consider how the effects of shocks and rates of convergence to an equilibrium differential are affected by borders, geography, and demographics. I find that even though a large wage differential exists between them, the labor markets of the United States and Mexico are closely integrated. Mexico's border region is more integrated with the United States than is the Mexican interior. Evidence of integration precedes the North American Free Trade Agreement (NAFTA) and may be largely the result of migration.

Suggested Citation

  • Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
  • Handle: RePEc:aea:aecrev:v:90:y:2000:i:4:p:742-764 Note: DOI: 10.1257/aer.90.4.742
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    References listed on IDEAS

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    1. Gordon H. Hanson & Raymond Robertson & Antonio Spilimbergo, 2002. "Does Border Enforcement Protect U.S. Workers From Illegal Immigration?," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 73-92, February.
    2. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    3. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, pages 1337-1357.
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    5. Richard B. Freeman, 1982. "Crime and the Labor Market," NBER Working Papers 1031, National Bureau of Economic Research, Inc.
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    7. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, pages 371-393.
    8. David F. Hendry & Neil R. Ericsson, 1999. "Encompassing and rational expectations: How sequential corroboration can imply refutation," Empirical Economics, Springer, pages 1-21.
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    15. Trejo, Stephen J, 1997. "Why Do Mexican Americans Earn Low Wages?," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1235-1268, December.
    16. Hanson, Gordon H., 1996. "Economic integration, intraindustry trade, and frontier regions," European Economic Review, Elsevier, vol. 40(3-5), pages 941-949, April.
    17. Borjas, George J, 1983. "The Substitutability of Black, Hispanic, and White Labor," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 93-106, January.
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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F15 - International Economics - - Trade - - - Economic Integration

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