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Trade Reform and Inequality: The Case of Mexico and Argentina in the 1990s
Author(s) -
Acosta Pablo,
MontesRojas Gabriel V.
Publication year - 2008
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2008.01100.x
Subject(s) - economics , latin americans , free trade , international economics , liberalization , economic integration , trade barrier , international trade , gravity model of trade , empirical evidence , commercial policy , international free trade agreement , inequality , political science , market economy , mathematical analysis , mathematics , philosophy , epistemology , law
This paper provides empirical assessments of one of the leading explanations for the increase in skill premium in Mexico and Argentina during the 1990s: trade liberalisation. We present evidence showing that imports increase skill premium in Mexico, while exports reduce it. In Argentina, trade increased skill premium in the early 1990s (the beginning of trade reforms), although it reduced it later in the decade. These results are helpful for a comparison between South–South integration, FTAA or bilateral FTAs with Northern economies as alternative trade policy options for Latin American countries.