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Wages and productivity in Mexican manufacturing

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  • Lopez-Acevedo, Gladys

Abstract

The author identifies the determinants of wages and productivity in Mexico over time using national representative linked employer-employee databases from the manufacturing sector. She shows that both employers and employees are benefiting from investments in education, training, work experience, foreign research and development, and openness after the North American Free Trade Agreement (NAFTA). Additional years of schooling have a higher impact on wages and productivity after NAFTA than before. Endogenous training effects are larger for productivity than for wages, suggesting that the employers share the costs and returns to training. The author also finds that investment in human capital magnifies technology-driven productivity gains. By comparing four regions of Mexico-north, center, south, and Mexico City-regional wage and productivity gaps are found to have increased over time.

Suggested Citation

  • Lopez-Acevedo, Gladys, 2003. "Wages and productivity in Mexican manufacturing," Policy Research Working Paper Series 2964, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2964
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    References listed on IDEAS

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    1. Alan Barrett & Philip J. O'Connell, 2001. "Does Training Generally Work? The Returns to in-Company Training," ILR Review, Cornell University, ILR School, vol. 54(3), pages 647-662, April.
    2. Rosholm, Michael & Nielsen, Helena Skyt & Dabalen, Andrew, 2007. "Evaluation of training in African enterprises," Journal of Development Economics, Elsevier, vol. 84(1), pages 310-329, September.
    3. Dearden, Lorraine & Reed, Howard & Van Reenen, John, 2000. "Who Gains when Workers Train? Training and Corporate Productivity in a Panel of British Industries," CEPR Discussion Papers 2486, C.E.P.R. Discussion Papers.
    4. Jacob Mincer, 1989. "Human Capital Responses to Technological Change in the Labor Market," NBER Working Papers 3207, National Bureau of Economic Research, Inc.
    5. Mark Doms & Timothy Dunne & Kenneth R. Troske, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 253-290.
    6. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    7. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    8. Oosterbeek, Hessel & van Praag, Mirjam, 1995. "Firm-Size Wage Differentials in the Netherlands," Small Business Economics, Springer, vol. 7(3), pages 173-182, June.
    9. Verner, Dorte, 1999. "Are wages and productivity in Zimbabwe affected by human capital investment and international trade?," Policy Research Working Paper Series 2101, The World Bank.
    10. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    11. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    12. Sargent, John & Matthews, Linda, 1997. "Skill development and integrated manufacturing in Mexico," World Development, Elsevier, vol. 25(10), pages 1669-1681, October.
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    Citations

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    Cited by:

    1. Hugo Ñopo & Miguel Robles & Jaime Saavedra, 2008. "Occupational training to reduce gender segregation: The impacts of ProJoven," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, issue 62, pages 33-54.
    2. Maliranta, Mika & Asplund, Rita, 2007. "Training and Hiring Strategies to Improve Firm Performance," Discussion Papers 1105, The Research Institute of the Finnish Economy.
    3. Sebastián Calónico & Hugo R. Ñopo, 2008. "Gender Segregation in the Workplace and Wage Gaps: Evidence from Urban Mexico 1994-2004," IDB Publications (Working Papers) 1621, Inter-American Development Bank.
    4. Benoît Mahy & Mélanie Volral, 2008. "The effect of quantitative and qualitative training on labour demand in Belgium: a monopolistic competition approach," Economics of Education Working Paper Series 0021, University of Zurich, Department of Business Administration (IBW).
    5. Sebastian Calonico & Hugo Ñopo, 2008. "Segregación de genero en el trabajo y diferenciales de salario: Evidencia de las zonas urbanas de Mexico 1994-2004," Research Department Publications 4580, Inter-American Development Bank, Research Department.
    6. Hong Tan & Lopez-Acevedo, Gladys, 2003. "Mexico : in-firm training for the knowledge economy," Policy Research Working Paper Series 2957, The World Bank.

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