The report concludes that there is little evidence of adverse impacts of Nafta on workers. The labour market recovered relatively quickly after the tragic adjustments of the 1994-95 Tequila Crisis, and unemployment and real wages returned to 1994 levels. Wages and employment tend to be higher in states with higher FDI and trade, and emigration from those states is lower. Wages are also higher in sectors with more exposure to imports or exports.
`Overall, there is little evidence that increased trade liberalisation has led to greater risk faced by workers, or an increase in the size of the informal sector,' says co-author William F Maloney. `More generally, free trade has increased the demand for a more skilled Mexican workforce, a challenge the educational system must be prepared to meet.'
Productivity
Due to Nafta, productivity growth rose sharply, as the amount of time for adoption of foreign technologies was cut in half relative to the pre-Nafta period. In addition, the national innovation effort also rose modestly after Nafta, possibly due to the strengthening of intellectual property rights.
Agriculture
The biggest surprise to researchers was the farm sector's resilience in the face of changes that included Nafta, the elimination of some price supports in the 1980s, the severe impacts of the 1995 crisis, and long-term declines in the agricultural relative prices. Although not necessarily Nafta-driven, domestic production and trade in agricultural goods rose across the late 1990s, the productivity of the irrigated lands increased, and subsidies and income supports for traditional agriculture became more efficient.
The report says that Mexican farmers, including those at the subsistence level, were not adversely impacted by Nafta as had been widely feared, although better policies for the non-export, non-irrigated agriculture, particularly in the southern states, are needed.
`Nafta has been quite positive for export agriculture, but it has probably had little impact on small farmers in the southern states who have suffered a long history of social, political and economic neglect,' says co-author Daniel Lederman. `There should be improvements in rural education, infrastructure, institutions and in rural development policies in general.'
Innovation
Overall, th
End of preview - This article contains approximately 998 words.
Subscribers: Log in now to read the full article
Not a Subscriber?
Choose from one of the following options
