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Maquiladoras and Standard of Living in Mexico Before and After NAFTA

Author

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  • Julio Huato

    (City University of New York - Graduate Center - Economics Department)

Abstract

This study assesses the impact across states of for-export, mostly foreign-owned manufacturing plants (commonly known as 'maquiladoras') on various measures of standard of living in Mexico, namely literacy rate, school attendance rates, housing characteristics, life expectancy, infant mortality, and an overall index of human development. The main data set used is from the population and housing censuses of 1980, 1990, and 2000. The study controls for the effect of nonmaquiladora economic activity and prior growth. To remove the endogeneity, maquiladora activity is instrumented with a measure of road transportation time to the nearest major border city in the United States. The resulting IV-TS- OLS and GLS regressions, pooled and with (state and time) fixed effects, are estimated and the results of the respective Hausman specification tests are reported. I conclude that, overall, with the inclusion of state and time effects, maquiladora activity shows no impact on the measures of standard of living analyzed, with one exception: undergraduate schooling rates.

Suggested Citation

  • Julio Huato, 2005. "Maquiladoras and Standard of Living in Mexico Before and After NAFTA," Development and Comp Systems 0508006, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0508006
    Note: Type of Document - zip; pages: 56. The appendix tables have many blank pages in between. Scroll down to see them all. I apologize for the inconvenience.
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    References listed on IDEAS

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    Cited by:

    1. Escobar Gamboa, Octavio Romano, 2009. "IDE entrants, exportations et productivité manufacturière : les différentes performances des régions mexicaines," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/3850 edited by Guillochon, Bernard, January.

    More about this item

    Keywords

    Maquiladoras; maquila; Mexico; manufacturing; liberalization; social welfare; standard of living; poverty;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems

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