The Myth of Market Failure: Employment and the Labor Market in Mexico

This book takes sharp issue with the prevailing perception that Mexican employment conditions have not improved or have even deteriorated over time. It reveals a steady and substantial improvement in the earnings of workers at the bottom of the nonagricultural wage structure and shows that rural-urban migration has caused migrants' earnings to rise signinficantly and has not prevented the rise of urban unskilled wages in general. The findings indicate that estimates of the underutilization of labor are not only grossly exaggerated but also misleading for the formulation of employment policy. The author uses new information to estimate the flow of migrant labor to the United States. His examination of Mexican labor markets shows the unexpected importance of nonagricultural labor for rural household incomes. Finally, he assesses the impact on employment of the recent economic crisis and draws on lessons of the past to advance employment policy prescriptions for the future.