TRADE LIBERALIZATION AND EMPLOYMENT IN MEXICO.

The purpose of this paper is to find out whether the Mexican liberalization process has affected the labor demand according to the neoclassical theory. Given that in Mexico the relatively abundant factor is unskilled labor it was expected: 1) a growth in the employment level due to a production expansion and a growth in the labor intensity, 2) a labor reassignment between sectors, and 3) the more dynamic sectors in labor demanding were those more unskilled labor intensive. According to the National Account System, between 1988 and 2004 in Mexico the export growth had not a great impact on the economic growth due to the increase of imports. Only in a few branches of de manufacturing industry, especially the maquiladoras, had a higher level of product employment elasticity. Labor reallocation was observed during mid 1990 decade due to a higher growth in the production of unskilled labor intensive goods.