Employment trends in the Mexican manufacturing sector

Abstract

This paper seeks to contribute to the discussion of the welfare effects of structural reform in Mexico. Since the outbreak of the debt crisis in 1982, the Mexican government adopted comprehensive policies of stabilization and structural adjustment designed to reestablish macroeconomic stability and further the insertion of Mexico into the international economy. Contrary to predictions made by proponents of trade liberalization, the impressive increase in manufacturing exports has not translated into an equivalent strong increase in manufacturing employment. By comparing micro data from National Urban Employment Surveys, Economic Census and National Income Accounts, we conclude that employment creation in the manufacturing sector actually declined, especially in export-oriented sectors. Whatever employment was created in the manufacturing sector during the period of reform, it was mainly concentrated in the maquiladora sector and micro and small enterprises. Given its welfare implications, this is an issue that deserves careful re-evaluation.