Trade Development and Political Economy presenst: David Atkin
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David Atkin Yale
University Endogenous Skill Acquisition and Export Manufacturing in Mexico
Studies based on firm-level data find that both exporting firms and
multinational corporations pay higher wages for a given skill level. However,
the literature overlooks the fact that export manufacturing firms may also
change the educational choices of the workforce. In this paper, Atkin confirms
that for Mexico during the period 1986-2000, the export sector pays higher
wages than other sectors, but school drop out increases with the arrival of new
export jobs. By the year 2000, the workers induced to enter export
manufacturing are earning less than they would have earned had the jobs never
appeared and they stayed in school longer. Atkin identifies the causal effects
by looking within municipalities and examining how the education of different
cohorts varies with new factory openings in the municipality at key
school-leaving ages. Export manufacturing attracts students by paying high
relative wages for unskilled workers, and offering many jobs to low-skill
workers straight out of school. The magnitudes Atkin finds suggest that for
every ten new jobs created, one student drops out of school at grade 9 rather
than continuing on through grade 12.
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