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Trade and Wages: Two Puzzles from Mexico


  • Raymond Robertson


Mexico plays an important role in the developing-country trade-liberalisation literature because it liberalised early and extensively. Numerous papers analysed changes in Mexican wage levels and inequality after Mexico joined the GATT in 1986. This paper reviews recent papers that analyse changes in wage levels and inequality since the North American Free Trade Agreement in 1994. Two main puzzles emerge. First, wage growth rates are similar before and after NAFTA. Second, Mexican wage inequality, which received much attention after its post-GATT rise, falls steadily after NAFTA. This paper reviews several possible explanations for these two phenomena. Copyright 2007 The Author Journal compilation 2007 Blackwell Publishing Ltd .

Suggested Citation

  • Raymond Robertson, 2007. "Trade and Wages: Two Puzzles from Mexico," The World Economy, Wiley Blackwell, vol. 30(9), pages 1378-1398, September.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:9:p:1378-1398

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    References listed on IDEAS

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    8. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, vol. 20(1), pages 109-144.
    9. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Raymundo Campos & Gerardo Esquivel & Nora Lustig, 2012. "The Rise and Fall of Income Inequality in Mexico, 1989–2010," Working Papers 267, ECINEQ, Society for the Study of Economic Inequality.
    2. Harris, Richard G. & Robertson, Peter E., 2013. "Trade, wages and skill accumulation in the emerging giants," Journal of International Economics, Elsevier, vol. 89(2), pages 407-421.
    3. Jordaan, Jacob A., 2011. "FDI, Local Sourcing, and Supportive Linkages with Domestic Suppliers: The Case of Monterrey, Mexico," World Development, Elsevier, vol. 39(4), pages 620-632, April.
    4. 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.
    6. Raymundo M. Campos-Vázquez & Andrés Hincapié & Ruben Irvin Rojas-Valdés, 2012. "Family Income Inequality and the Role of Married Females' Earnings in Mexico: 1988-2010," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 49(1), pages 67-98, May.
    7. Benedikt Heid & Mario Larch & Alejandro Riaño, 2011. "Maquiladoras and Informality: A Mixed Blessing," CESifo Working Paper Series 3689, CESifo Group Munich.
    8. Claudia Tello & Raul Ramos & Manuel Artís, 2012. "Changes in wage structure in Mexico going beyond the mean: An analysis of differences in distribution, 1987-2008," Working Papers XREAP2012-07, Xarxa de Referència en Economia Aplicada (XREAP), revised May 2012.
    9. repec:sae:envira:v:49:y:2017:i:12:p:2718-2738 is not listed on IDEAS
    10. Chiquiar Daniel, Covarrubias Enrique, Salcedo Alejandrina, 2017. "Labor market consequences of trade openness and competition in foreign markets," Working Papers 2017-01, Banco de México.
    11. Robert A. Blecker & Gerardo Esquivel, 2010. "NAFTA, Trade and Development (Robert A. Blecker and Gerardo Esquivel)," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(4), pages 17-30, December.
    12. Robert A. Blecker & Gerardo Esquivel, 2009. "NAFTA, Trade, and Development," Working Papers 2009-24, American University, Department of Economics.
    13. Arabage, Amanda Cappellazzo & Souza, André Portela Fernandes de, 2015. "Labor earnings dynamics in post-stabilization Brazil," Textos para discussão 390, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    14. Amoroso, Nicolás & Chiquiar, Daniel & Ramos-Francia, Manuel, 2011. "Technology and endowments as determinants of comparative advantage: Evidence from Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 22(2), pages 164-196, August.
    15. Raymundo M. Campos-Vazquez & Nora Lustig, 2017. "Labour income inequality in Mexico: Puzzles solved and unsolved," WIDER Working Paper Series 186, World Institute for Development Economic Research (UNU-WIDER).
    16. Garduno-Rivera, Rafael, 2010. "Effect of NAFTA on Mexico's Income Distribution in the Presence of Migration," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61895, Agricultural and Applied Economics Association.
    17. Fukase, Emiko, 2013. "Export Liberalization, Job Creation, and the Skill Premium: Evidence from the US–Vietnam Bilateral Trade Agreement (BTA)," World Development, Elsevier, vol. 41(C), pages 317-337.
    18. repec:unu:wpaper:wp2012-10 is not listed on IDEAS

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