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The aim of this paper is to examine the effect of economic openness on wage dispersion. To this end, using a fixed effects panel model, we evaluate the impact of exports and foreign direct investment (FDI), as well as productivity and education, on wage dispersion in 14 economic subsectors in Mexico during the period 1999-2021. The main findings show that: i) increasing exports tend to diminish wage dispersion; ii) the flow of FDI seems to increase wage dispersion; iii) productivity and the heterogeneity of the productive network are determining factors in the dynamics of average wages. In this context, it is important to implement a variety of industrial and labour policies to effectively absorb the dynamic advantages associated with economic openness, such as the reduction of wage dispersion. [ABSTRACT FROM AUTHOR]

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Copyright of Latin American Policy is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)