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The Impact of Maquiladora Investment on the Size Distribution of Income Along the U.S.-Mexico Border: The Case of Texas

David J. Molina, Steven L. Cobb

Abstract


The last twenty years have seen the growth and development of maquiladora industries in the northern border region of Mexico. The maquiladoras are seen as a means to address the low income and high unemployment of the region (Schwartz 1987). To this point, most studies have concentrated on income and employment in the U.S. border region (Erickson 1970, Smith and Neumann 1977, Davila and Mattila 1985) and a few have examined the overall economic impact maquiladoras have on the region (Seligson and Williams 1981, ITC 1986, Clement and Jenner 1988). The employment and income effects of the maquiladoras on the U.S. side has been studied for the nation as a whole without arriving at a consensus. The effects of the growth of maquiladoras on the size distribution of income has received very little attention, particularly in terms of the counties on the U.S. side of the border.

This study examines the effects of external investment (in the form of maquiladoras) on the income distribution of the residents of the border counties in Texas. The analysis will pay special attention to the impact of this investment on the large Hispanic population of this border region. The article proceeds as follows. In section two the background of the border region and of some of the relevant issues are discussed. In section three the model and the data are presented. Section four continues with an interpretation of the results. Finally, section five contains the conclusion.


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

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