Institutions of skill formation in Mexico

Abstract

This chapter examines the national institutions in Mexico that affect the Mexican auto parts suppliers’ skilling strategies, drawing from the discussions in the literature on comparative capitalisms and comparative political economy of skill formation. The chapter elaborates the national institutions in Mexico that define the training practices available to firms and influence the labour market dynamics, which then will shape firms’ training and hiring costs and form complementarities in the multilevel skill system. The chapter shows that there are three main institutional structures that complement the skill system: the vocational education and training system, labour regulations and the minimum wage structure, and firms’ location and public transportation services. The low commitment of the Mexican state in these structures has been a major factor shaping these institutions, and has resulted in arrangements that are very different from those in Turkey.