Using Panel Data to Estimate the Effect of the North American Free Trade Agreement on Employment and Wages at the State Level

Mark Gius

New York Economic Review, 2006, vol. 37, issue 1, 20-31

Abstract: I determine the effect of NAFTA on employment and wages in the United States. I use a panel-data set of 50 states for 1980-2000, and a two-stage least squares, fixed effects model. I estimate equations for employment and wages. Empirical results indicate that NAFTA had a negative effect on employment and a positive effect on wages. Chow Test results suggest that there is a break in both the employment and wage relationships in 1994, the year NAFTA became effective.

Date: 2006
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