Publication

This paper considers the contribution of foreign direct investment (FDI) to employment generation in Mexico. The authors ask if FDI has helped overcome the country's pressing labor market problems. They find that it has a significantly positive, though quantitatively modest impact on manufacturing employment in Mexico. Moreover, they find no evidence supporting the widely held view that FDI adds to white collar employment in the first place. They argue, however, that the positive effect on blue collar employment diminishes with increasing skill intensity of manufacturing industries.