THE STOLPER-SAMUELSON THEOREM, WAGE GAP AND TRADE LIBERALIZATION: A COMPARATIVE ANALYSIS OF MEXICO AND THE UNITED STATES, 1990-2020

The standard theory of international trade maintains that free trade leads to good and factor of production prices equalization. Following this conventional wisdom, North American countries -in particular Mexico- engaged in a major trade liberalization which led significant increases of both exports and foreign direct investment in Mexico. The aim of this article is to assess whether economic liberalization has induced a Stolper-Samuelson effect in Mexico and the United States. An econometric model is built using panel data for the period 1990-2020 to enquire whether the wage gap has been affected by trade liberalization. It is shown empirically that such gap has been reduced for low-skilled Mexican workers, whereas a similar phenomenon is confirmed for higher-skilled American workers.