Has NAFTA Increased Labor Market Integration between the United States and Mexico?
This article analyzes three criteria for labor market integration between Mexico and the United States (U.S.) before and since the North American Free Trade Agreement (NAFTA): the responsiveness of Mexican wages to US wage shocks, the speed at whic...
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| Format: | Journal Article |
| Language: | English en_US |
| Published: |
Published by Oxford University Press on behalf of the World Bank
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2005/09/17752946/nafta-increased-labor-market-integration-between-united-states-mexico http://hdl.handle.net/10986/16469 |
| Summary: | This article analyzes three criteria for
labor market integration between Mexico and the United
States (U.S.) before and since the North American Free Trade
Agreement (NAFTA): the responsiveness of Mexican wages to US
wage shocks, the speed at which relative wages return to a
long-run differential, and changes in the rate of
convergence of absolute wages. Tests for increased
integration using these three criteria generate mixed
results, which are then explored by directly incorporating
trade, foreign direct investment (FDI), and migration. The
results suggest that trade and FDI did in fact positively
contribute to integration but that the increase in border
enforcement depressed Mexican wages, masking the positive benefits. |
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