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The NAFTA Agreement and Labor Force Projections: Implications for the Border Region

James B. Pick, Skye Stephenson-Glade

Abstract


There have been numerous studies which evaluate the impact of NAFTA on employment, immigration, the environment and other areas of concern. However, one key area has received little attention: the linkage between the potential effect of growth and change in the Mexican labor force and the presence of a North American Free Trade Zone. The linkage is in both directions. The success or failure of NAFTA will be fundamentally affected by the size, age, education and job skills of the Mexican labor force. Moreover, the Mexican labor force will be affected by NAFTA. In particular, the number, type and location of job opportunities over the next several decades will be determined, at least partially, by the success or failure of NAFTA.

This article contains an analysis of projections of the Mexican labor force in relation to the recently enacted NAFTA agreement. We begin with a discussion of the NAFTA agreement, concentrating on its labor force implications in Mexico and the U.S. During this discussion, we pay particular attention to the implications of our analysis on the border region. We then present the projections of the Mexican labor force, looking at alternative assumptions for fertility, international migration and economic activity rates. While our primary focus is on the Mexican labor force, projections of the U.S. labor force need to be considered also. Finally, the policy implications of the projected labor force changes under alternative NAFTA scenarios will be considered.


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©2009
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Print ISSN: 0886-5655
Online ISSN: 2159-1229

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