The magnitude of existing research on the effects of trade reform is impressive. Yet economists have not reached a clear consensus on a number of important questions such as the labor market impact of trade reform, the linkages between trade and foreign direct investment, and the relationship...

This article analyzes the effect of trade liberalization on employment and wages in the Mexican manufacturing sector. The study documents that many of the rents generated by trade protection were absorbed by workers in the form of a wage premium. Trade liberalization affected firm-level...