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Regional Labor Market Integration: Northern Mexico and Southern USA


  • Willy W. Cortez

    (Universidad de Guadalajara)

  • Alejandro Islas-Camargo

    (Instituto Tecnologico Autonomo de México)


In this paper, the analysis of co-dependence between the US and Mexico labor markets is carried out by estimating the cyclical component of California’s and Texas’ manufacturing employment and four US Border Mexican cities through the Hodrick-Prescott filter. We estimated the smoothing parameter following a calibration technique proposed by Guerrero et al (2001) which allows us to obtain the best linear unbiased estimator of the trend component. Our analysis suggests that after 1994 there has been greater labor market integration between Mexico’s northern region and US’ southern region. This greater integration has implied a change in the nature of the short term relationship of manufacturing employment between Mexico and the US. The change is also significant on the relationship between Mexican real wages and US employment.

Suggested Citation

  • Willy W. Cortez & Alejandro Islas-Camargo, 2004. "Regional Labor Market Integration: Northern Mexico and Southern USA," Urban/Regional 0409011, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0409011
    Note: Type of Document - pdf; pages: 38. FDI and Labor Market Integration

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    References listed on IDEAS

    1. William R. Cline, 1995. "International Debt Reexamined," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 46.
    2. Alan Barkema & Mark Drabenstott, 1994. "A new agricultural policy for a new world market," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 59-72.
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    More about this item


    Labor Market Integration; US-Mexico border; Hodrick-Prescott filter;

    JEL classification:

    • J - Labor and Demographic Economics

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