Exporting vs. education

Also known as Mexico fact of the day.  Here is a new result from David Atkin, published in the American Economic Review:

This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms (the years 1986 to 2000) altered the distribution of education. I use variation in the timing of factory openings across commuting zones to show that school drop-out increased with local expansions in export-manufacturing industries. The magnitudes I find suggest that for every 25 jobs created, one student dropped out of school at grade 9 rather than continuing through to grade 12. These effects are driven by less-skilled export-manufacturing jobs which raised the opportunity cost of schooling for students at the margin.

The title is “Endogenous Skill Acquisition and Export Manufacturing in Mexico,” here are earlier ungated copies.  By the way, here is my earlier discussion of why Mexico is not a better-educated nation:

A high school diploma brings higher wages in Mexico, but in the United States the more educated migrants do not earn noticeably more than those who have less education. Education does not much raise the productivity of hard physical labor. The result is that the least educated Mexicans have the most reason to cross the border. In addition, many Mexicans, knowing they may someday go to the United States, see less reason to invest in education.

It seems both factors matter.

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