IDEAS home Printed from https://ideas.repec.org/a/pal/eurjdr/v34y2022i6d10.1057_s41287-021-00497-8.html
   My bibliography  Save this article

Regional Differences in Human Capital and Occupational Choice: Evidence from Mexico

Author

Listed:
  • Kanat Abdulla

    (Nazarbayev University)

  • Balzhan Serikbayeva

    (Nazarbayev University)

  • Yessengali Oskenbayev

    (Kazakh-British Technical University)

  • Farhad Taghizadeh-Hesary

    (Tokai University)

Abstract

This study attempts to explain productivity differences across regions in Mexico using individual-level census data. We argue that differences in education quality, school attendance, and occupational choices influence aggregate productivity across regions. To quantify these effects, we build a general equilibrium model with labor market frictions, education quality, and school enrollment. Our model predicts that increasing education quality and school enrollment rates raises the productivity of the Mexican regions, on average, by 7% and 17%, respectively. The regions with the occupational distribution skewed toward higher-skilled occupations are, on average, 3–4% more productive than the regions with lower levels of productivity. We also consider the effect of gender barriers on productivity as women encounter difficulties in having access to a wider variety of occupational choices than men. Mexico also has a significant proportion of women working in the home sector. Using a counterfactual analysis where women in the home sector are replaced by men, we find that reducing barriers for women to work in the broader labor market would increase the aggregate regional productivity by 9–12%. We also find that migration has a minimal effect on regional productivity.

Suggested Citation

  • Kanat Abdulla & Balzhan Serikbayeva & Yessengali Oskenbayev & Farhad Taghizadeh-Hesary, 2022. "Regional Differences in Human Capital and Occupational Choice: Evidence from Mexico," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2899-2922, December.
  • Handle: RePEc:pal:eurjdr:v:34:y:2022:i:6:d:10.1057_s41287-021-00497-8
    DOI: 10.1057/s41287-021-00497-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41287-021-00497-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1057/s41287-021-00497-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    2. Teresa Molina Millán & Tania Barham & Karen Macours & John A Maluccio & Marco Stampini, 2019. "Long-Term Impacts of Conditional Cash Transfers: Review of the Evidence," The World Bank Research Observer, World Bank Group, vol. 34(1), pages 119-159.
    3. John Kennan & James R. Walker, 2011. "The Effect of Expected Income on Individual Migration Decisions," Econometrica, Econometric Society, vol. 79(1), pages 211-251, January.
    4. Brock, Gregory & German-Soto, Vicente, 2013. "Regional industrial growth in Mexico: Do human capital and infrastructure matter?," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 228-242.
    5. Chang-Tai Hsieh & Enrico Moretti, 2019. "Housing Constraints and Spatial Misallocation," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(2), pages 1-39, April.
    6. Kanat Abdulla, 2021. "Corrosive effects of corruption on human capital and aggregate productivity," Kyklos, Wiley Blackwell, vol. 74(4), pages 445-462, November.
    7. Bryan, Gharad & Morten, Melanie, 2019. "The aggregate productivity effects of internal migration: evidence from Indonesia," LSE Research Online Documents on Economics 88177, London School of Economics and Political Science, LSE Library.
    8. German Cubas & B. Ravikumar & Gustavo Ventura, 2016. "Talent, Labor Quality, and Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 160-181, July.
    9. Chiquiar, Daniel, 2005. "Why Mexico's regional income convergence broke down," Journal of Development Economics, Elsevier, vol. 77(1), pages 257-275, June.
    10. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    11. German Cubas & B. Ravikumar & Gustavo Ventura, 2016. "Talent, Labor Quality, and Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 160-181, July.
    12. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    13. Marti Mestieri & Johanna Schauer & Robert Townsend, 2017. "Human Capital Acquisition and Occupational Choice: Implications for Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 151-186, April.
    14. Matthieu Clement & Lucie Piaser, 2021. "Geography of Income and Education Inequalities in Mexico: Evidence from Small Area Estimation and Exploratory Spatial Analysis," Post-Print hal-03436437, HAL.
    15. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    16. David Cuberes & Marc Teignier, 2016. "Aggregate Effects of Gender Gaps in the Labor Market: A Quantitative Estimate," Journal of Human Capital, University of Chicago Press, vol. 10(1), pages 1-32.
    17. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    18. Morrison, Andrew & Raju, Dhushyanth & Sinha, Nistha, 2007. "Gender equality, poverty and economic growth," Policy Research Working Paper Series 4349, The World Bank.
    19. Winters, John V., 2011. "Human capital, higher education institutions, and quality of life," Regional Science and Urban Economics, Elsevier, vol. 41(5), pages 446-454, September.
    20. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
    21. Jarillo, Brenda & Magaloni, Beatriz & Franco, Edgar & Robles, Gustavo, 2016. "How the Mexican drug war affects kids and schools? Evidence on effects and mechanisms," International Journal of Educational Development, Elsevier, vol. 51(C), pages 135-146.
    22. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
    23. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-1278, December.
    24. repec:idb:brikps:77778 is not listed on IDEAS
    25. Elisenda Rentería & Guadalupe Souto & Iván Mejía-Guevara & Concepció Patxot, 2016. "The Effect of Education on the Demographic Dividend," Population and Development Review, The Population Council, Inc., vol. 42(4), pages 651-671, December.
    26. Fabio Manca, 2012. "Human Capital Composition and Economic Growth at the Regional Level," Regional Studies, Taylor & Francis Journals, vol. 46(10), pages 1367-1388, November.
    27. Michael Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk? - Working Paper 264," Working Papers 264, Center for Global Development.
    28. Yu Liu & Thomas M. Fullerton, 2015. "Evidence from Mexico on social status and violence against women," Applied Economics, Taylor & Francis Journals, vol. 47(40), pages 4260-4274, August.
    29. Chang‐Tai Hsieh & Erik Hurst & Charles I. Jones & Peter J. Klenow, 2019. "The Allocation of Talent and U.S. Economic Growth," Econometrica, Econometric Society, vol. 87(5), pages 1439-1474, September.
    30. Behrman, Jere R & Sengupta, Piyali & Todd, Petra, 2005. "Progressing through PROGRESA: An Impact Assessment of a School Subsidy Experiment in Rural Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 237-275, October.
    31. Utar, Hale & Ruiz, Luis B. Torres, 2013. "International competition and industrial evolution: Evidence from the impact of Chinese competition on Mexican maquiladoras," Journal of Development Economics, Elsevier, vol. 105(C), pages 267-287.
    32. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 83-106, Summer.
    33. Abdulla, Kanat, 2019. "Productivity gains from reallocation of talent in Brazil and India," Journal of Macroeconomics, Elsevier, vol. 62(C).
    34. Gharad Bryan & Melanie Morten, 2019. "The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2229-2268.
    35. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
    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. Abdulla, Kanat, 2021. "Regional convergence and structural transformation in a resource-dependent country," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 548-557.
    2. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2014. "Does Education Matter for Economic Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 334-359, June.
    3. Altinok, Nadir & Aydemir, Abdurrahman, 2017. "Does one size fit all? The impact of cognitive skills on economic growth," Journal of Macroeconomics, Elsevier, vol. 53(C), pages 176-190.
    4. Jellal, Mohamed & Bouzahzah, Mohamed, 2012. "Gouvernance éducation et croissance économique [Governance education and economic growth]," MPRA Paper 38687, University Library of Munich, Germany.
    5. Hanushek, Eric A., 2013. "Economic growth in developing countries: The role of human capital," Economics of Education Review, Elsevier, vol. 37(C), pages 204-212.
    6. Mohamed Jellal & Mohamed, Bouzahzah & Simplice A. Asongu, 2015. "Institutional Governance, Education and Growth," Research Africa Network Working Papers 15/059, Research Africa Network (RAN).
    7. Córdoba, Juan Carlos & Ripoll, Marla, 2013. "What explains schooling differences across countries?," Journal of Monetary Economics, Elsevier, vol. 60(2), pages 184-202.
    8. Stephen J. Redding, 2020. "Trade and Geography," NBER Working Papers 27821, National Bureau of Economic Research, Inc.
    9. Valerio Mendoza, Octasiano Miguel & Borsi, Mihály Tamás & Comim, Flavio, 2022. "Human capital dynamics in China: Evidence from a club convergence approach," Journal of Asian Economics, Elsevier, vol. 79(C).
    10. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    11. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    12. Stimpfle, Alexander & Stadelmann, David, 2015. "The Impact of Fundamental Development Factors on Different Income Groups: International Evidence," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113128, Verein für Socialpolitik / German Economic Association.
    13. Rossi,Federico, 2018. "Human Capital and Macro-Economic Development : A Review of the Evidence," Policy Research Working Paper Series 8650, The World Bank.
    14. Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2017. "Knowledge Capital and Aggregate Income Differences: Development Accounting for US States," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 184-224, October.
    15. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    16. Clas Eriksson & Johan Lindén & Christos Papahristodoulou, 2023. "Human capital, innovation, and growth," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(2), pages 343-369, June.
    17. Eric A. Hanushek, 2017. "Education and the Growth-Equity Trade-Off," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 293-312, National Bureau of Economic Research, Inc.
    18. Werner, Katharina & Prettner, Klaus, 2015. "Public education and R&D-based economic growth," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112997, Verein für Socialpolitik / German Economic Association.
    19. Lim, Jamus Jerome & Adams-Kane, Jonathon, 2008. "Institutions, Education, and Economic Performance," MPRA Paper 11800, University Library of Munich, Germany.
    20. Les OXxley & Ttrinh Le & John Gibson, 2008. "Measuring Human Capital: Alternative Methods and International Evidence," Korean Economic Review, Korean Economic Association, vol. 24, pages 283-344.

    More about this item

    Keywords

    Human capital; Occupational distribution; Productivity; Gender gap; Quality of education; Migration;
    All these keywords.

    JEL classification:

    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    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:pal:eurjdr:v:34:y:2022:i:6:d:10.1057_s41287-021-00497-8. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    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.