During the past 15 years, Mexico experienced what Latin America social scientist call a change in its "development model." Gone is the import-substitution industrialization model that had characterized Mexico since the 1930s. Instead, Mexico has become a fairly open economy in which state...

This paper studies theoretically and empirically why and how labor policies may reduce productivity and employment in order to stabilize labor incomes and redistribute resources. It proposes a specific stylized model where the tradeoffs facing labor policies are influenced by structural factors,...