Effects of manufacturing dynamics on returns to education in the North of Mexico

This paper examines the pattern of the labor market appraisal of workers’ schooling, focusing on the Northern regions of the country. The manufacturing industry is studied in particular since a large part of the economic activity is located in the North, relative to the rest of the country’s regions. The change in the manufacturing industry has been affected by international shocks, trade agreement regulations and the entrance of stronger competitors with a supply of low-skill workers, such as Asian countries. Quantile estimation results show that the labor market valued less the additional years of education acquired by workers over the period from 1988 to 2011. Results show that workers at the lowest part of the distribution are the ones who seem to be most affected in terms of education investment by the decline of manufacturing activity in the Northern region.