Foreign direct investment and youth educational outcomes in Mexican municipalities

Ibarra-Olivo, J. E. ORCID: https://orcid.org/0000-0002-3873-2886 (2021) Foreign direct investment and youth educational outcomes in Mexican municipalities. Economics of Education Review, 82. 102123. ISSN 0272-7757 doi: 10.1016/j.econedurev.2021.102123

Abstract/Summary

Inward foreign direct investment (IFDI) has often been considered to play a prominent role in the development of human capital in the host economy by introducing a foreign wage premium into the labour market. However, extant evidence on IFDI labour market effects is inconclusive, especially in emerging economies. We investigate for the case of Mexico whether foreign wage premia have an effect on educational outcomes of young cohorts that were 15 years old at the time of IFDI arrival in their municipality of residence. Results suggest that increasing foreign wage premium for unskilled jobs, both in manufacturing and services, has negative effects on a cohort’s subsequent educational outcomes. The effects of foreign wage premium for skilled workers, however, are not significant but may lead to positive educational outcomes. The long-term implications of losses accruing from low investment in human capital do not only affect individuals but regions as well.

Item Type	Article
URI	https://reading-pure-test.eprints-hosting.org/id/eprint/97578
Identification Number/DOI	10.1016/j.econedurev.2021.102123
Refereed	Yes
Divisions	Henley Business School > International Business and Strategy Central Services
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