Abstract

CEREZO GARCIA, Verónica; LANDA DIAZ, Heri Oscar  and  PERROTINI HERNANDEZ, Ignacio. Effects of trade and financial liberalization on wages: the case of Mexico’s manufacturing sector. Anál. econ. [online]. 2024, vol.39, n.100, pp.119-135.  Epub Apr 23, 2024. ISSN 2448-6655.  https://doi.org/10.24275/uam/azc/dcsh/ae/2024v39n100/cerezo.

The aim of this paper is to examine the effect of economic openness on wage dispersion. To this end, using a fixed effects panel model, we evaluate the impact of exports and foreign direct investment (FDI), as well as productivity and education, on wage dispersion in 14 economic subsectors in Mexico during the period 1999-2021. The main findings show that: i) increasing exports tend to diminish wage dispersion; ii) the flow of FDI seems to increase wage dispersion; iii) productivity and the heterogeneity of the productive network are determining factors in the dynamics of average wages. In this context, it is important to implement a variety of industrial and labour policies to effectively absorb the dynamic advantages associated with economic openness, such as the reduction of wage dispersion.

Keywords : Trade openness; Transnational corporations; Wages; Panel model.