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Skill premia in Mexico: demand and supply factors

  • Gabriel Montes Rojas

Skill premia trends for the Mexican urban labour market are analysed, decomposing into demand and supply factors. Moreover, among the former both between and within effects are studied, in line with the Katz and Murphy decomposition. It is shown that demand factors are more important for explaining the initial increment in skill premia, but supply factors are responsible for driving them down. It is concluded that the North American Trade Agreement (NAFTA) favours unskilled labour.

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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 14 ()
Pages: 917-924

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:14:p:917-924
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  1. Dupuy,Arnaud & Borghans,Lex, 2003. "Supply and Demand, Allocation and Wage Inequality: An International Comparison," ROA Research Memorandum 009, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  2. Robertson, Raymond & Dutkowsky, Donald H., 2002. "Labor adjustment costs in a destination country: the case of Mexico," Journal of Development Economics, Elsevier, vol. 67(1), pages 29-54, February.
  3. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
  4. Kang-Shik Choi & Jinook Jeong, 2005. "Technological change and wage premium in a small open economy: the case of Korea," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 119-131.
  5. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
  6. Francisco Galrao Carneiro & Jorge Saba Arbache, 2003. "Assessing the impacts of trade on poverty and inequality," Applied Economics Letters, Taylor & Francis Journals, vol. 10(15), pages 989-994.
  7. 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.
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