| Previous research suggests that Mexico's trade reforms during the mid-eighties increased employment, output and wages in the northern part of the country, while other regions did not reap any benefits from them. In Chapter 1, I review this literature and summarize the main hypotheses that have been set forth to explain this behavior. This literature is mostly based in the first stage of Mexico's globalization, before NAFTA was enacted. In this context, the broad topic of my dissertation is to analyze the regional implications of Mexico's liberalization, with a special focus on Mexico's experience with NAFTA.;I first study to what extent the reforms led to increasing regional inequality in per-capita GDP. In Chapter 2, I extend the sample used by previous authors to include Mexico's regional growth patterns after NAFTA and I explore what kind of factors account for the loss of convergence across Mexico's states. The results not only suggest that, after 1985, convergence across Mexican states' per-capita outputs was lost, but also imply that convergence was not restored with the enactment of NAFTA.;Chapter 3 extends this analysis by studying what kind of factors determined Mexico's regional wage differentials and their changes between 1990 and 2000. I use individual-level data on wages and personal characteristics, as well as state-level data on trade, investment, migration and other site-specific features, to evaluate the importance of globalization in determining regional wage differentials across Mexico. The results suggest that globalization appears to have been the main determinant of the increase in regional wage differentials observed across Mexico between 1990 and 2000.;Finally, the fourth chapter estimates counterfactual wage densities for Mexican immigrants in the U.S., in which these individuals are assumed to be paid according to Mexico's wage structure. The findings suggest that, if Mexican immigrants in the U.S. were paid according to current skill prices in Mexico, they would occupy the middle and upper portions of Mexico's wage distribution. This implies that migration abroad may not only affect wage inequality in the host country, but it may also raise wage inequality in Mexico. |
