<p>Recent changes in trade policy between the United States and Mexico, particularly the imposition of tariffs on key manufacturing inputs, have increased economic uncertainty and affected labor stability in Mexico’s electronics manufacturing sector. This study uses a systems dynamics approach to analyze how these external shocks influence labor market dynamics among leading electronics manufacturing companies competing for skilled labor. The proposed model captures both qualitatively and quantitatively the interdependence of hiring and turnover decisions among three major employers in the sector. Historical data on hiring, attrition, and workforce levels over five years were used to calibrate the model, while ARIMA forecasts informed expected attrition trends. Policy scenarios were simulated to evaluate strategies aimed at reducing unemployment and turnover. The results indicate that moderate hiring reductions (–10%) and a 20% attrition reduction can stabilize employment and limit turnover, whereas larger hiring cuts or aggressive growth reductions may trigger firm instability or closure, particularly for intermediate-sized companies. The study contributes methodologically by integrating competition in the labor market into a dynamic model and, in practice, by offering relevant perspectives for managing job stability in a context of geopolitical trade tensions.</p>

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Labor market competition in Mexico’s electronics manufacturing: a system dynamic model for trade policy evaluation

  • Erika Lopez-Sanchez,
  • Adrian Ramirez-Nafarrate,
  • Araceli Zavala,
  • Armando Elizondo-Noriega,
  • Raul F. Montalvo Corzo

摘要

Recent changes in trade policy between the United States and Mexico, particularly the imposition of tariffs on key manufacturing inputs, have increased economic uncertainty and affected labor stability in Mexico’s electronics manufacturing sector. This study uses a systems dynamics approach to analyze how these external shocks influence labor market dynamics among leading electronics manufacturing companies competing for skilled labor. The proposed model captures both qualitatively and quantitatively the interdependence of hiring and turnover decisions among three major employers in the sector. Historical data on hiring, attrition, and workforce levels over five years were used to calibrate the model, while ARIMA forecasts informed expected attrition trends. Policy scenarios were simulated to evaluate strategies aimed at reducing unemployment and turnover. The results indicate that moderate hiring reductions (–10%) and a 20% attrition reduction can stabilize employment and limit turnover, whereas larger hiring cuts or aggressive growth reductions may trigger firm instability or closure, particularly for intermediate-sized companies. The study contributes methodologically by integrating competition in the labor market into a dynamic model and, in practice, by offering relevant perspectives for managing job stability in a context of geopolitical trade tensions.