Keywords
relative wages
economic reform
regions
How to Cite
Abstract
This paper reviews studies attempting to explain raising wage disparities that accompanied the 1987-1994 initial stages of economic reform and liberalization and provides further evidence regarding the case of Tijuana. The study undertaken suggests that there is indeed a case to held a rising demand of skilled labour accountable for increasing wage inequality. However, evidence is not without problems, particularly when regional factors are introduced into the analysis. The evidence provided in the paper from the case of Tijuana on returns to university education cast further doubts. Being a leading site of new exports, economic activity in Tijuana, including manufacturing, does seem to be demanding more medium-low skill labour than high skill workers. Additionally, a comparison between Tijuana and Mexico City confirms that demand for high skill labour in Tijuana is relatively weak.This paper suggests, without further elaboration, that i nstitutional factors keeping wages low for the less skilled workers might have played an important role in rising income inequality.
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