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EMPLOYMENT, WAGES AND ECONOMIC DEVELOPMENT IN MEXICO AND THE UNITED STATES, 1965-2015: IMPACT OF INDUSTRY AND THE EFFECTS OF NAFTA

Maria-Carmen Guisan () and Eva Aguayo

Applied Econometrics and International Development, 2017, vol. 17, issue 2

Abstract: We present a comparison economic development, productivity, wages and employment in Mexico and the United States, for a period of 50 years ( 1965-2015). Accordingly to Kaldor´s contributions and the empirical evidence we think that it is very important, for to improve industrial development. Mexico experienced an average increase, of industrial real value-added per capita, around 15 USD per year (at constant prices of year 2000) both before NAFTA (period 1964-1993) and after NAFTA (for the period 1994-2012). The U.S. experienced higher increases: 75 USD per year in the first period and 39 per year in the second one. We estimate two macro-econometric equations, for both countries, showing the positive impact of industry on non industrial production and employment. Our conclusion, on the evolution of Mexico after NAFTA. is that it had some positive effects but not enough to get an important and sustained increase of industry, income per capita and wages in this country. Regarding the U.S. NAFTA has had also some positive effects, and the economy has evolved with important and sustained increase of economic development, income per capita and wages, both before and after NAFTA. Our recommendation is to increase cooperation between both countries in order to foster economic development, increasing industrial development.

Keywords: Economic Development; Macroeconometric equations of Employment; Mexico and the United States; Effects of NAFTA; Industrial Development. (search for similar items in EconPapers)
JEL-codes: C5 E2 E24 J23 L6 O5 O51 O54 (search for similar items in EconPapers)
Date: 2017
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