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Trade Reform and Inequality: The Case of Mexico and Argentina in the 1990s

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  • Pablo Acosta
  • Gabriel V. Montes-Rojas

Abstract

This paper provides empirical assessments of one of the leading explanations for the increase in skill premium in Mexico and Argentina during the 1990s: trade liberalisation. We present evidence showing that imports increase skill premium in Mexico, while exports reduce it. In Argentina, trade increased skill premium in the early 1990s (the beginning of trade reforms), although it reduced it later in the decade. These results are helpful for a comparison between South-South integration, FTAA or bilateral FTAs with Northern economies as alternative trade policy options for Latin American countries. Copyright 2008 The Authors. Journal compilation 2008 Blackwell Publishing Ltd.

Suggested Citation

  • Pablo Acosta & Gabriel V. Montes-Rojas, 2008. "Trade Reform and Inequality: The Case of Mexico and Argentina in the 1990s," The World Economy, Wiley Blackwell, vol. 31(6), pages 763-780, June.
  • Handle: RePEc:bla:worlde:v:31:y:2008:i:6:p:763-780
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    References listed on IDEAS

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    Cited by:

    1. Gerardo Esquivel, 2010. "The dynamics of income inequality in Mexico since NAFTA," Serie documentos de trabajo del Centro de Estudios Económicos 2010-09, El Colegio de México, Centro de Estudios Económicos.
    2. Gerardo Esquivel, 2011. "The Dynamics of Income Inequality in Mexico since NAFTA," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2011), pages 155-188, August.
    3. Hilscher, Jens & Raviv, Alon, 2014. "Bank stability and market discipline: The effect of contingent capital on risk taking and default probability," Journal of Corporate Finance, Elsevier, vol. 29(C), pages 542-560.
    4. Björn Kauder & Niklas Potrafke, 2015. "Globalization and social justice in OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 353-376.
    5. Bergh, Andreas & Nilsson, Therese, 2010. "Do liberalization and globalization increase income inequality?," European Journal of Political Economy, Elsevier, pages 488-505.
    6. Fernando Parro, 2013. "Capital-Skill Complementarity and the Skill Premium in a Quantitative Model of Trade," American Economic Journal: Macroeconomics, American Economic Association, pages 72-117.
    7. Oded Galor & Ömer Özak, 2016. "The Agricultural Origins of Time Preference," American Economic Review, American Economic Association, vol. 106(10), pages 3064-3103, October.
    8. Roberto Alvarez & Ricardo Lopez, 2008. "Skill Upgrading and the Real Exchange Rate," Caepr Working Papers 2008-020, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
    9. Julian Emami Namini & Ricardo A. López, 2013. "Factor price overshooting with trade liberalization: theory and evidence," Scottish Journal of Political Economy, Scottish Economic Society, pages 139-181.
    10. Sebastian Galiani & Guillermo Cruces & Pablo Acosta & Leonardo C. Gasparini, 2017. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework," NBER Working Papers 24015, National Bureau of Economic Research, Inc.
    11. Roberto Álvarez & Ricardo A. López, 2009. "Skill Upgrading and the Real Exchange Rate," The World Economy, Wiley Blackwell, pages 1165-1179.
    12. Fukase, Emiko, 2013. "Export Liberalization, Job Creation, and the Skill Premium: Evidence from the US–Vietnam Bilateral Trade Agreement (BTA)," World Development, Elsevier, pages 317-337.

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