Capital and labor mobility in Mexico
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My dissertation is comprised of three essays that examine the implications of capital and labor mobility for wages, employment, child labor and manufacturing production in Mexico. The first essay examines the effect of Mexican interstate immigration and international return migration of labor and foreign capital on wages and employment in the maquiladora industry in Mexico. I consider these issues by first computing cost and demand functions for Mexican skilled and unskilled labor in the Textile maquiladora industry in 20 Mexican states for 1998-2001. The same analysis is performed for the Food, Beverage and Tobacco industry comprised of 10 Mexican states. In both industries the results suggest that the demand for skilled relative to unskilled workers is wage elastic and that foreign direct investment is more beneficial to skilled workers and increases their relative wages and demand. Separately, using the Mexican Census 2000 I estimate the e®ect of migration on the equilibrium wage and employment of each labor type in the six divisions of the manufacturing industry. The results show that interstate immigration and international return migration have positive effects on wages. A combination of these two models allows calculation of the effects of labor and capital migration on the demand for each factor and changes in factor shares. My findings suggest that wages and employment in the maquiladora industry are insensitive to inflows of migrants.