Looking for Local Labor Market Effects of NAFTA

Using U.S. Census data for 1990 to 2000, we estimate effects of NAFTAon U.S.wages.We look for effects of the agreement by industry and by geography, measuring each industry's vulnerability to Mexican imports and each locality's dependence on vulnerable industries. We find evidence of both effects, dramatically lowering wage growth for blue-collar workers in the most affected industries and localities (even for service-sector workers in affected localities, whose jobs do not compete with imports). These distributional effects are much larger than aggregate welfare effects estimated by other authors.