TY  - JOUR
AU  - Bernard,Andrew B.
AU  - Robertson,Raymond
AU  - Schott,Peter K.
TI  - Is Mexico A Lumpy Country?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10898
PY  - 2004
Y2  - November 2004
UR  - http://www.nber.org/papers/w10898
L1  - http://www.nber.org/papers/w10898.pdf
N1  - Author contact info:
Andrew B. Bernard
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH  03755
Tel: 603/646-0302
Fax: 603/646-0995
E-Mail: Andrew.B.Bernard@dartmouth.edu

Raymond Robertson
Department of Economics
Macalester College
1600 Grand Ave
St. Paul MN 55105
Tel: 6516966739
Fax: 6516966746
E-Mail: robertson@macalester.edu

Peter K. Schott
Yale School of Management
135 Prospect Street
New Haven, CT 06520-8200
Tel: 203/436-4260
Fax: 203/432-6974
E-Mail: peter.schott@yale.edu
AB  - Mexico's experience before and after trade liberalization presents a challenge to neoclassical trade theory. Though labor abundant, it nevertheless exported skill-intensive goods and protected labor-intensive sectors prior to liberalization. Post-liberalization, the relative wage of skilled workers rose. Courant and Deardorff (1992) have shown theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage. We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries. This heterogeneity helps to both undermine Mexico's aggregate labor abundance and motivate behavior that is more consistent with relative skill abundance.
ER  -