Michael Ian Cragg

Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?

In the mid 1980s, Mexico undertook major trade reform, privatization and deregulation. This coincided with a rapid expansion in wages and employment that led to a rise in wage dispersion. This paper examines the role of industry and occupation-specific effects in explaining the growing dispersion. We find that despite the magnitude and pace of the reforms, industry-specific effects explain little of the rising wage dispersion. In contrast occupation-specific effects can explain almost half of the growing wage dispersion. Finally, we find that the economy became more skill-intensive and that this effect was larger for the traded sector because this sector experienced much smaller low-skilled employment growth. We therefore suggest that competition from imports had an important role in the fall of the relative demand for less-skilled workers.

Climate consumption and climate pricing from 1940 to 1990

Abstract This paper studies trends in US climate consumption and climate compensating differentials. Three findings emerge. First, the population has shifted so that the consumption of warmer winter climate has risen for both working families and more dramatically for senior citizens. Second, there has been a rise in rental capitalization. Third, earnings capitalization has declined. Between 1960 and 1990, the relative price of climate has increased for senior citizens and fallen for working families.