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Trade Liberalization and Wage Inequality in Mexico
Gordon H. Hanson and Ann Harrison
Vol. 52, No. 2 (Jan., 1999), pp. 271-288
Published by: Sage Publications, Inc.
Stable URL: http://www.jstor.org/stable/2525166
Page Count: 18
You can always find the topics here!Topics: Employment, Tariffs, Price changes, Wages, Income inequality, Skilled labor, Manufacturing industries, Trade policy, Relative prices, Industrial products
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During the 1980s in Mexico the wage gap between skilled and unskilled workers widened. The authors assess the extent to which this increased wage inequality was associated with Mexico's sweeping trade reform in 1985. Examining data on 2,354 Mexican manufacturing plants for 1984-90 and Mexican Industrial Census data for 1965-88, they find that the reduction in tariff protection in 1985 disproportionately affected low-skilled industries. Goods from that sector, the authors suggest, may have fallen in price because of increased competition from economies with reserves of cheap unskilled labor larger than Mexico's. The consequent increase in the relative price of skill-intensive goods could explain the increase in wage inequality.
ILR Review © 1999 Sage Publications, Inc.