The Labor Market Effects of FDI: A Panel Data Evidence from Mexico |
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| Authors: | Amarendra Sharma Oscar Cardenas |
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| Institution: | 1. Department of Economics, Elmira College, Elmira, NY, USA;2. School of International Service, American University, Washington, DC, USAasharma@elmira.edu;4. International Association of Local Public Economics (Asociación Internacional de Economía Pública Local), Mexico City, Mexico |
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| Abstract: | ABSTRACTThis paper explores the effects of Foreign Direct Investment (FDI) inflows on six labor market outcomes by using a panel data of the Mexican states from 2005 to 2015. By relying on the system Generalized Method of Moments estimator to address potential endogeneity of FDI in the labor market outcomes regressions, this study finds that the FDI inflows result in a reduction in the overall unemployment rate. Moreover, the FDI is associated with a decrease in the percentage of employed people with the need and availability to offer more working hours and an increase in the median hourly wage rate. The FDI is not likely to influence the critical employment, informal sector employment, and unemployment duration. |
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| Keywords: | Foreign direct investment employment panel data Mexico |
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