Effects of Increased Trade and Investment on Human Development in the U.S. and Mexican Border Communities

Abstract

This paper analyzes the effects of increased trade and investment on population growth and the quality of life in the U.S. and Mexican border regions. The analysis on quality of life changes is based on 1990 and 2000 U.S. and Mexican census data. Quality of life is measured by a Border Human Development Index. We find that increased trade and investment has had a major impact on population growth and migration, especially in the Mexican border communities. With respect to changes in the quality of life, there is evidence of improvement on both sides of the border, but only the gains on the Mexican side appear to be linked to trade and investment. The evidence indicates that the increased U.S.-Mexican trade and investment has affected the border communities on the Mexican side of the border more so than those on the U.S. side.