Economic Integration Across Latin America: Evidence from Labor Markets, 1990–2013

Daniel Lederman and Raymond Robertson

Chapter 3 in Not Just Neighbors:The Remarkable Economic Relationships in North America, 2026, pp 77-104 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Standard trade theory predicts that trade liberalization should benefit abundant factors, yet empirical evidence from developing economies often reveals more complex patterns. This study investigates how exposure to international markets influences employment, wages, and productivity across sectors and regions. Combining cross-country and sectoral data shows that trade integration tends to generate employment and wage gains in regions and sectors that are more connected to international markets. At the same time, the benefits of trade are unevenly distributed across workers and locations. Firms engaged in exporting or global supply chains adopt new technologies and production practices that increase productivity and demand skilled labor. These changes raise wages for some workers while leaving others less affected. Regional characteristics, including industrial composition and access to export markets, play an important role in shaping these outcomes. The findings highlight the importance of complementary policies that improve worker mobility, skill development, and regional adjustment in order to ensure that the gains from trade are more broadly shared.

Keywords: US–Mexico Trade; Economic Integration; North American Competitiveness; USMCA / NAFTA; Global Supply Chains; Migration and Labor Markets; Wage Inequality; Cross-border Economics; Trade Policy and Development; Regional Economic Integration; US–Mexico Relations; Bilateral Trade Flows; Border Economy; Globalization and Inequality; Policy Responses to Trade Shocks (search for similar items in EconPapers)
JEL-codes: F13 F15 F22 J61 O24 P16 P52 (search for similar items in EconPapers)
Date: 2026
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