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T he Mexican trade liberalization process and its net effects on employment: 1988-2004

  • Rosario Cervantes

    ()

    (Universidad de Guadalajara)

  • Gerardo Fujii

    (Universidad Nacional Autonoma de Mexico)

This paper examines the direct and indirect effects of trade liberalization on employment in Mexico. First, we estimate the net effect that export and import growth has had on employment; and second, inasmuch as Mexico is a country relatively abundant in unskilled labor, we seek to verify whether the most dynamic sectors in terms of employment creation have been those expected by trade reform promoters, i.e., tradable-goods sectors such as manufacturing, where unskilled labor is used more intensively. We find that, between 1988 and 2004, the net balance of job creation by foreign trade was positive and increasing until 2000. Unskilledlabor-intensive manufactures and non-tradable goods and services (in an indirect way) sectors have been the main contributors to employment growth associated with foreign trade. The net effect of foreign trade on employment tends to be negative in skilled labor-intensive manufacturing sectors.

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Article provided by Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia. in its journal EconoQuantum, Revista de Economia y Negocios.

Volume (Year): 9 (2012)
Issue (Month): 2 (Julio-Diciembre)
Pages: 81-97

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Handle: RePEc:qua:journl:v:9:y:2012:i:2:p:81-97
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  1. Hoekman & Bernard & Winters, L. Alan, 2005. "Trade and employment : stylized facts and research findings," Policy Research Working Paper Series 3676, The World Bank.
  2. Cragg, Michael Ian & Epelbaum, Mario, 1996. "Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?," Journal of Development Economics, Elsevier, vol. 51(1), pages 99-116, October.
  3. Gerry Boyle & Pauline McCormack, 2002. "Trade and technological explanations for changes in sectoral labour demand in OECD economies," Applied Economics, Taylor & Francis Journals, vol. 34(5), pages 617-635.
  4. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July.
  5. Trefler, Daniel & Zhu, Susan Chun, 2010. "The structure of factor content predictions," Journal of International Economics, Elsevier, vol. 82(2), pages 195-207, November.
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