Trade, Technology and Wage Inequality
In Mexico during the 1980s, the wages of more-educated, more- experienced workers rose relative to those of less-educated, less- experienced workers. We assess the extent to which the increase in the skilled-unskilled wage gap was associated with Mexico's recent trade reform. In particular, we examine whether trade reform has shifted employment towards industries that are relatively intensive in the use of skilled labor (Stolper-Samuelson-type effects). The results suggest that the rising wage gap is associated with changes internal to industries and even internal to plants that cannot be explained by Stolper-Samuelson-type effects. We also find that other characteristics associated with globalization -- such as foreign investment and export orientation -- matter. Exporting firms and joint ventures pay higher wages to skilled workers and demand more skilled labor than other firms.
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"Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras,"
NBER Working Papers
5122, National Bureau of Economic Research, Inc.
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"Cross-Country Patterns of Change in Relative Wages,"
in: NBER Macroeconomics Annual 1992, Volume 7, pages 239-300
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- Michael Ian Cragg & Mario Epelbaum, 1995. "The Premium for Skills in LDCs: Evidence from Mexico," Working Papers 9505, Centro de Investigacion Economica, ITAM.
- Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
- Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184 Elsevier.
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- Robert E. Lipsey, 1994. "Foreign-Owned Firms and U.S. Wages," NBER Working Papers 4927, National Bureau of Economic Research, Inc.
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