Cruise Ship Ports and Human Capital Development The Case of Mexico

The cruise ship industry, the fastest-growing segment in the leisure travel market, has contributed significantly to the economic transformation of developing countries, particularly in the Caribbean Basin. This paper applies a difference-in-differences methodology to examine the causal impact of the introduction of cruise ship ports on human capital development in Mexico, as reflected by educational attainment. Using variations in school enrollment, segregated by gender and age across states and municipalities, I find that the economic consequences derived from this form of tourism do not translate into incremental, permanent improvements in all quality of life indicators considered, most saliently in schooling. These results are consistent with those obtained by recent studies to the effect that the creation of low-paying, low-skilled positions by export activities has a detrimental impact on school enrollment as the opportunity costs outweigh returns to education. They also corroborate other research postulating that in regions relatively more affected by international tourism the local expansion in services is offset by reduction in other forms of economic activity.