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The Effects of Macroeconomic Shocks on Employment: The Case of Mexico

Author

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  • Raymundo M. Campos-Vázquez

    (El Colegio de México)

Abstract

This paper studies the effects of macroeconomic shocks in employment and wages for the case of Mexico. I find that young and unskilled workers are the most affected by an economic shock in terms of unemployment, labor force participation and employment in the informal sector. I derive a theoretical model to study the effects of macroeconomic shocks on wages and employment composition. The theoretical findings imply that the elasticities of labor supply in the formal and informal sector are close to 0.75 and 0 respectively, and both labor demand elasticities are close to 1.

Suggested Citation

  • Raymundo M. Campos-Vázquez, 2010. "The Effects of Macroeconomic Shocks on Employment: The Case of Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 25(1), pages 177-246.
  • Handle: RePEc:emx:esteco:v:25:y:2010:i:1:p:177-246
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    File URL: http://estudioseconomicos.colmex.mx/archivo/EstudiosEconomicos2010/177-246.pdf
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    References listed on IDEAS

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    Cited by:

    1. Antón-Sarabia, Arturo & Hernández-Trillo, Fausto, 2014. "Optimal gasoline tax in developing, oil-producing countries: The case of Mexico," Energy Policy, Elsevier, pages 564-571.

    More about this item

    Keywords

    Mexico; employment; wages; shocks; informality;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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