Labor adjustment costs in a destination country: the case of Mexico

Robertson, Raymond; Dutkowsky, Donald H.

doi:10.1016/s0304-3878(01)00176-6

Cited by 22 publications

(16 citation statements)

References 26 publications

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“…10 10 One problem with this simple calculation is that it abstracts from business cycle effects. Robertson and Dutkowsky (2002) confirm that non‐production workers have higher adjustment costs than production workers in Mexico. This finding implies that the aggregate non‐production‐production worker ratio will have a business cycle component.…”

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confidence: 80%

Trade and Wages: Two Puzzles from Mexico

Robertson

2007

World Economy

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Mexico plays an important role in the developing-country trade-liberalisation literature because it liberalised early and extensively. Numerous papers analysed changes in Mexican wage levels and inequality after Mexico joined the GATT in 1986. This paper reviews recent papers that analyse changes in wage levels and inequality since the North American Free Trade Agreement in 1994. Two main puzzles emerge. First, wage growth rates are similar before and after NAFTA. Second, Mexican wage inequality, which received much attention after its post-GATT rise, falls steadily after NAFTA. This paper reviews several possible explanations for these two phenomena. Copyright 2007 The Author Journal compilation 2007 Blackwell Publishing Ltd .

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confidence: 80%

Trade and Wages: Two Puzzles from Mexico

Robertson

2007

World Economy

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“…18 Here we assume that labor market adjustment costs are small such that factors are perfectly mobile between industries and, therefore, wages are equalized across industries. Robertson and Dutkowsky (2002) find that labor market adjustment costs in Mexico are about 1/10 of estimated adjustment costs in the U.S. the industrial survey data, I am forced to use ''gross'' output prices rather than ''net'' output prices. 19 Feenstra and introduce two additional estimation issues.…”

Section: The Mandated Wage Approachmentioning

confidence: 99%

Relative prices and wage inequality: evidence from Mexico

Robertson

2004

Journal of International Economics

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This paper examines the link between relative goods prices and relative wages during two periods of Mexico's trade liberalization. The relative price of skill-intensive goods rose following Mexico's entrance to the General Agreement and Tariffs and Trade (GATT) in 1986, but fell after Mexico entered the North American Free Trade Agreement (NAFTA) in 1994. This paper adds a band pass filter to two established techniques to compare the relationship between prices and wages. Results from all three approaches are consistent with a positive long-run relationship between relative output prices and relative wages. The band pass filter results suggest that the relevant time frame for the relationship begins after 3 -5 years. D Although over 100 recent papers analyze the relationship between globalization and wage inequality, the theoretical and empirical link between them remains contested. Starting with the Stolper -Samuelson theorem, a standard result in trade theory that links changes in goods prices and changes in relative factor prices, this paper considers two issues that arise in the trade and wages debate. The first issue is whether changes in relative prices can explain changes in relative wages and whether changes in tariffs and trade policy explain movements in relative prices. The second is when changes in relative prices affect relative wages.To examine these two questions, this paper examines Mexico's trade liberalization. Revisiting the Mexican case is important for two reasons. Studying the Mexican case may 0022-1996/$ -see front matter D

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“…See Heckman and Pagés (2000) and Robertson and Dutkowsky (2002) for examples of estimates of labor market adjustment costs in Latin America and a discussion of their link to labor market legislation.…”

Section: E C O N O M I a Spring 2005mentioning

confidence: 99%