In this paper, I study what factors determined the changes in Mexico's regional wage differentials during the nineties. I exploit the regional variation in exposure to international markets to identify the effects of NAFTA on wages and the skill premium. The results support the presence of Stolper-Samuelson type of responses during Mexico's trade liberalization: regions more exposed to globalization appear to have exhibited an increase in overall wage levels, but a decrease in the skill premium, relative to other regions of the country. The results suggest that trade liberalization has a spatial dimension that is usually neglected in traditional models. © 2007 Elsevier B.V. All rights reserved.
CITATION STYLE
Chiquiar, D. (2008). Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico. Journal of International Economics, 74(1), 70–93. https://doi.org/10.1016/j.jinteco.2007.05.009
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