Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare
This study performs an ex-post analysis of the effects of the trade liberalization in Mexico between 1989 and 2000, taking into account regional differences in the Mexican economy. The effects of trade liberalization are first translated into chang...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/04/3335911/benefited-trade-liberalization-mexico-measuring-effects-household-welfare http://hdl.handle.net/10986/14777 |
| id |
okr-10986-14777 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-147772021-04-23T14:03:20Z Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare Nicita, Alessandro AGRICULTURAL PRODUCTS AGRICULTURE APPAREL AVERAGE PRICES AVERAGE TARIFF BORDER PRICE CAPITAL FLOWS CHANGES IN TRADE COMPETITIVE PRESSURES CONSUMERS COST OF LIVING DEMAND ELASTICITY DEVALUATION DISEQUILIBRIUM DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC MARKETS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC THEORY ELASTICITY EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXPENDITURES FACTOR ENDOWMENTS FACTOR MARKETS FOREIGN CURRENCY GDP IMPACT OF TRADE IMPACT OF TRADE POLICIES IMPORT PRICES IMPORTS INCOME INCOME ADJUSTMENTS INCOME DISTRIBUTION INCOME EFFECT INCOME ELASTICITIES INCOME GROUPS INDIFFERENCE CURVES INFLATION INFLATION RATE LABOR FORCE LABOR MARKET LABOR MARKETS MARGINAL UTILITY MARKET IMPERFECTIONS OPENNESS POVERTY LINE PRICE CHANGES PRICE EFFECT PRICE ELASTICITIES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE INDEXES PRODUCERS PRODUCTION COSTS PRODUCTION FUNCTION PROFIT MARGIN PURCHASING PURCHASING POWER REAL INCOME REAL WAGES SPREAD SUPPLIERS TARIFF RATE TARIFF RATES TARIFF REDUCTION TARIFF REVENUE TARIFF SCHEDULE TIME SERIES TRADE COSTS TRADE FLOWS TRADE LIBERALIZATION TRADE LIBERALIZATION PROCESS TRADE POLICIES TRADE POLICY TRADE REFORMS TRADE RESTRICTIONS TRANSACTION COSTS TRANSPORT COSTS UNSKILLED LABOR UNSKILLED WORKERS UTILITY FUNCTION WAGE DIFFERENTIALS WAGE GAP WAGE RATE WAGE RATES WAGES TRADE POVERTY HOUSEHOLD ANALYSIS EARNINGS FARM HOUSEHOLD ECONOMIES LABOR INCOME AGRICULTURAL INCOME INCOME GAPS CONSUMPTION TRADE LIBERALIZATION GEOGRAPHIC DISTRIBUTION SKILLED WORKERS This study performs an ex-post analysis of the effects of the trade liberalization in Mexico between 1989 and 2000, taking into account regional differences in the Mexican economy. The effects of trade liberalization are first translated into changes in regional prices and wages. Those estimates are plugged into a farm-household model to estimate the effect on households' welfare. The findings suggest that trade liberalization has affected domestic prices and labor income differently both across income groups and geographically across the country, hence producing diverse outcomes on different households. Regarding prices, the results indicate that trade liberalization has lowered relative prices of most non-animal agricultural products and, while reducing the cost of consumption, has reduced households' agricultural income, widening the income gap between urban and rural areas. The findings also show that trade liberalization has had diverse effects on wage rates. Skilled workers, for which trade liberalization has produced an increase in wages, have benefited relative to unskilled workers. Wages of unskilled workers have in many regions decreased as a result of trade liberalization. Similar differences are found in the geographic distribution of the benefits of trade liberalization, with the states closest to the U. S. border gaining threefold more relative to the least developed states in the south. Therefore trade liberalization, although beneficial, has contributed to an increase in inequality between the south and the north of the country, urban and rural areas, and skilled and unskilled labor. From a poverty perspective, the trade liberalization that occurred between 1989 and 2000 has had the direct effect of reducing poverty by about 3 percent, therefore lifting approximately 3 million individuals out of poverty. 2013-08-02T21:02:02Z 2013-08-02T21:02:02Z 2004-04 http://documents.worldbank.org/curated/en/2004/04/3335911/benefited-trade-liberalization-mexico-measuring-effects-household-welfare http://hdl.handle.net/10986/14777 English en_US Policy Research Working Paper;No.3265 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGRICULTURAL PRODUCTS AGRICULTURE APPAREL AVERAGE PRICES AVERAGE TARIFF BORDER PRICE CAPITAL FLOWS CHANGES IN TRADE COMPETITIVE PRESSURES CONSUMERS COST OF LIVING DEMAND ELASTICITY DEVALUATION DISEQUILIBRIUM DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC MARKETS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC THEORY ELASTICITY EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXPENDITURES FACTOR ENDOWMENTS FACTOR MARKETS FOREIGN CURRENCY GDP IMPACT OF TRADE IMPACT OF TRADE POLICIES IMPORT PRICES IMPORTS INCOME INCOME ADJUSTMENTS INCOME DISTRIBUTION INCOME EFFECT INCOME ELASTICITIES INCOME GROUPS INDIFFERENCE CURVES INFLATION INFLATION RATE LABOR FORCE LABOR MARKET LABOR MARKETS MARGINAL UTILITY MARKET IMPERFECTIONS OPENNESS POVERTY LINE PRICE CHANGES PRICE EFFECT PRICE ELASTICITIES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE INDEXES PRODUCERS PRODUCTION COSTS PRODUCTION FUNCTION PROFIT MARGIN PURCHASING PURCHASING POWER REAL INCOME REAL WAGES SPREAD SUPPLIERS TARIFF RATE TARIFF RATES TARIFF REDUCTION TARIFF REVENUE TARIFF SCHEDULE TIME SERIES TRADE COSTS TRADE FLOWS TRADE LIBERALIZATION TRADE LIBERALIZATION PROCESS TRADE POLICIES TRADE POLICY TRADE REFORMS TRADE RESTRICTIONS TRANSACTION COSTS TRANSPORT COSTS UNSKILLED LABOR UNSKILLED WORKERS UTILITY FUNCTION WAGE DIFFERENTIALS WAGE GAP WAGE RATE WAGE RATES WAGES TRADE POVERTY HOUSEHOLD ANALYSIS EARNINGS FARM HOUSEHOLD ECONOMIES LABOR INCOME AGRICULTURAL INCOME INCOME GAPS CONSUMPTION TRADE LIBERALIZATION GEOGRAPHIC DISTRIBUTION SKILLED WORKERS |
| spellingShingle |
AGRICULTURAL PRODUCTS AGRICULTURE APPAREL AVERAGE PRICES AVERAGE TARIFF BORDER PRICE CAPITAL FLOWS CHANGES IN TRADE COMPETITIVE PRESSURES CONSUMERS COST OF LIVING DEMAND ELASTICITY DEVALUATION DISEQUILIBRIUM DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC MARKETS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC THEORY ELASTICITY EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXPENDITURES FACTOR ENDOWMENTS FACTOR MARKETS FOREIGN CURRENCY GDP IMPACT OF TRADE IMPACT OF TRADE POLICIES IMPORT PRICES IMPORTS INCOME INCOME ADJUSTMENTS INCOME DISTRIBUTION INCOME EFFECT INCOME ELASTICITIES INCOME GROUPS INDIFFERENCE CURVES INFLATION INFLATION RATE LABOR FORCE LABOR MARKET LABOR MARKETS MARGINAL UTILITY MARKET IMPERFECTIONS OPENNESS POVERTY LINE PRICE CHANGES PRICE EFFECT PRICE ELASTICITIES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE INDEXES PRODUCERS PRODUCTION COSTS PRODUCTION FUNCTION PROFIT MARGIN PURCHASING PURCHASING POWER REAL INCOME REAL WAGES SPREAD SUPPLIERS TARIFF RATE TARIFF RATES TARIFF REDUCTION TARIFF REVENUE TARIFF SCHEDULE TIME SERIES TRADE COSTS TRADE FLOWS TRADE LIBERALIZATION TRADE LIBERALIZATION PROCESS TRADE POLICIES TRADE POLICY TRADE REFORMS TRADE RESTRICTIONS TRANSACTION COSTS TRANSPORT COSTS UNSKILLED LABOR UNSKILLED WORKERS UTILITY FUNCTION WAGE DIFFERENTIALS WAGE GAP WAGE RATE WAGE RATES WAGES TRADE POVERTY HOUSEHOLD ANALYSIS EARNINGS FARM HOUSEHOLD ECONOMIES LABOR INCOME AGRICULTURAL INCOME INCOME GAPS CONSUMPTION TRADE LIBERALIZATION GEOGRAPHIC DISTRIBUTION SKILLED WORKERS Nicita, Alessandro Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper;No.3265 |
| description |
This study performs an ex-post analysis
of the effects of the trade liberalization in Mexico between
1989 and 2000, taking into account regional differences in
the Mexican economy. The effects of trade liberalization are
first translated into changes in regional prices and wages.
Those estimates are plugged into a farm-household model to
estimate the effect on households' welfare. The
findings suggest that trade liberalization has affected
domestic prices and labor income differently both across
income groups and geographically across the country, hence
producing diverse outcomes on different households.
Regarding prices, the results indicate that trade
liberalization has lowered relative prices of most
non-animal agricultural products and, while reducing the
cost of consumption, has reduced households'
agricultural income, widening the income gap between urban
and rural areas. The findings also show that trade
liberalization has had diverse effects on wage rates.
Skilled workers, for which trade liberalization has produced
an increase in wages, have benefited relative to unskilled
workers. Wages of unskilled workers have in many regions
decreased as a result of trade liberalization. Similar
differences are found in the geographic distribution of the
benefits of trade liberalization, with the states closest to
the U. S. border gaining threefold more relative to the
least developed states in the south. Therefore trade
liberalization, although beneficial, has contributed to an
increase in inequality between the south and the north of
the country, urban and rural areas, and skilled and
unskilled labor. From a poverty perspective, the trade
liberalization that occurred between 1989 and 2000 has had
the direct effect of reducing poverty by about 3 percent,
therefore lifting approximately 3 million individuals out of poverty. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Nicita, Alessandro |
| author_facet |
Nicita, Alessandro |
| author_sort |
Nicita, Alessandro |
| title |
Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare |
| title_short |
Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare |
| title_full |
Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare |
| title_fullStr |
Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare |
| title_full_unstemmed |
Who Benefited from Trade Liberalization in Mexico? Measuring the Effects on Household Welfare |
| title_sort |
who benefited from trade liberalization in mexico? measuring the effects on household welfare |
| publisher |
World Bank, Washington, D.C. |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/04/3335911/benefited-trade-liberalization-mexico-measuring-effects-household-welfare http://hdl.handle.net/10986/14777 |
| _version_ |
1764430063229468672 |