Trade and Employment in Mexico

This is a study of the link between foreign trade and industrial employment in Mexico. A general conclusion is that Mexico's potential employment-gains from an expansion of manufactured exports are extremely low. Another is that this cannot be attributed to labour market distortions. the national level of analysis, the study focuses first on export patterns and policies while relating these issues to the current financial crisis. Econometric techniques and a model of balance of payments are applied. The main result is the policy efforts to stimulate manufactured export growth are efficacious for attaining external balance. Second, the export performance of the manufacturing sector is appraised in relation to the objective of employment generation. The results lend support to the hypothesis that Mexico will find its comparative advantages in the export expansion of modern industries which adopt high-technology production processes. Using imput-output techniques and skill data by industry, it is shown that growth in external demand has little to offer for the solution of the urban employment problem and to the objective of improving income distribution. the labour market of metropolitian monterrey, the capital city of the state of Nuevo Leon. An input-output model for Nuevo Leon is presented in this part of the study. By using survey and secondary data, interindustry flows and final demand sectors are estimated. A modified version of the supply-demand pool technique is then used to derive the matrix of regional input coefficients. Multiplier analysis is performed and the employment effects to the state's manufactured exports are estimated. In general, the results confirm the conclusion drawn at the national level of analysis, and illustrate the importance of considering regional variables when designing trade and employment policies.