This paper analyzes the effects of localized labor demand shocks in the tradable sector, such as the establishment of a large tradable firm in a municipality, over nontradable formal and informal jobs in the case of Mexico. Results indicate that locations that experienced this shock have between...

We examine the impact of changes in local labor market concentration on two components of income inequality in Mexico: local wage shares and labor income inequality. Combining data from the Economic Census and the Population and Housing Censuses, we analyze the mechanisms that drive the...

We argue that greater misallocation is a key driver of the worse management practices in Mexico compared to the US. These management practices are strongly associated with higher productivity, growth, trade, and innovation. One indicator of greater misallocation in Mexico is the weaker...