Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico |
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Authors: | Daniel Chiquiar |
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Affiliation: | Dirección General de Investigación Económica, Banco de México, Av. 5 de Mayo 18, Col. Centro, México DF. 06059, Mexico |
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Abstract: | In this paper, I study what factors determined the changes in Mexico's regional wage differentials during the nineties. I exploit the regional variation in exposure to international markets to identify the effects of NAFTA on wages and the skill premium. The results support the presence of Stolper-Samuelson type of responses during Mexico's trade liberalization: regions more exposed to globalization appear to have exhibited an increase in overall wage levels, but a decrease in the skill premium, relative to other regions of the country. The results suggest that trade liberalization has a spatial dimension that is usually neglected in traditional models. |
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Keywords: | F11 F14 F16 |
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