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Using US Census data for 1990 and 2000, the authors estimate effects of the NAFTA agreement on the US wages. They look for any indication of effects of the agreement on local labor markets dependent on industries vulnerable to import competition from Mexico, and workers employed in industries competing with Mexican imports. They find evidence of only modest local labor-market effects, but evidence for a strong industry effect, dramatically lowering wage growth for blue-collar workers in the most affected industries. These distributional effects are much larger than aggregate welfare effects estimated by other authors.
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