Globalization

Over the last several decades, migration to the United States has greatly affected the Mexican economy. Obviously the biggest change has been to Mexico’s labor supply. Between 1970 and 2004, the individuals born in Mexico residing in the United States increased from 1.7% to 8.6%. Emigration rates have been rising steadily over time and are highest for young adults. Between 1990 and 2004, 10.0% of males and 7.7% of females born in Mexico between 1965 and 1974 migrated to the United States, raising the share of this age cohort living in the U.S. to 17.5% for males and 12.6% for females. But this is no recent thing for Mexico. Mexico started to experienced globalization way before people even started to think about globalization. . Globalization deepened during the 1980s, when the secondary exports model replaced Mexico’s import models. Nowadays, there is no doubt that the Mexican economy is fully oriented towards exports, which account for one-third of its GDP. At the same time, the transition from one model to the other had major consequences. The average labor earnings decreased by 10 percent for "low exposure" states, which are located mainly in the south, relative to high exposure states mostly in the north. In addition, during the 1990s, the low exposure areas saw a comparative increase in workers who could not earn enough to keep their families out of poverty. But this shows that during Mexico's globalization decade individuals born in states with high-exposure to globalization have done relatively well in terms of their labor earnings.