Local Labor Markets in Mexico

This dissertation studies how shocks to regional economies in Mexico shape employment, wages, human capital, fertility, and marriage in the short and medium run. The first chapter studies the causal impact of fluctuations in men's and women's labor market opportunities on fertility. I evaluate how jobs in the formal sector, in manufacturing, and at export-assembly plants (maquiladoras) in Mexico shape childbirth, selection into fertility, and the timing of births using two complementary identification strategies. The first strategy exploits exogenous shocks to demand for male versus female labor using a region's industrial structure, and the second uses establishment-level data from the universe of maquiladoras to construct an instrumental variable based on large expansions and contractions in plant employment. Results show that positive shocks in the short run to men's employment have large, positive effects on fertility, whereas positive shocks to women's employment have small net impacts in the short run. The second chapter tests the predictions of traditional models of the family. These models assume that men specialize in market work, whereas women specialize in household production. An implication of these models is that increases in women's wages, relative to men's wages, decrease the gains to marriage. Previous work has struggled with generating an accurate proxy for women's potential wages in middle-income countries, where women's labor force participation is often low and subject to selection bias. I create a measure of women's potential wages in the market, which applies regardless if women actually work, and show that the predictions of the models hold in Mexico. I also find that women are more likely to be heads of households and to be single mothers in response to increases in their relative wages. The third chapter evaluates the causal impact of Chinese export shocks on Mexico's local labor markets. The findings indicate that important margins of adjustment to labor demand shocks in Mexico differ from those found in other studies on wealthy countries. Municipalities with greater exposure to Chinese trade penetration do not experience bigger drops in the share of the population employed in manufacturing, nor are other measures on the extensive margin of employment affected. Instead, I find large negative impacts on wages, human capital levels, and the skilled-labor share of manufacturing. I also find consistently negative impacts across the conditional wage distribution, with workers in higher quantiles in manufacturing suffering slightly larger wage decreases than workers in lower quantiles.PHDEconomicsUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttps://deepblue.lib.umich.edu/bitstream/2027.42/144060/1/arussov_1.pd

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Peer reviewedPublisher PD

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