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Unions and Wage Inequality in Mexico

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  • David Fairris

Abstract

This paper offers empirical evidence on the impact of trade unions on wage inequality in Mexico. The results indicate that unions were a strongly equalizing force affecting the dispersion of wages in 1984, but were only half as effective at reducing wage inequality in 1996. Not only did the unionized percentage of the labor force fall considerably over the period, unions also lost some of their ability to reduce wage dispersion among the workers they continued to represent. Had unions maintained in 1996 the same structural power they possessed in 1984, the rise in wage inequality in the formal sector of the labor market between those years would have been reduced by roughly 11%.

Suggested Citation

  • David Fairris, 2003. "Unions and Wage Inequality in Mexico," ILR Review, Cornell University, ILR School, vol. 56(3), pages 481-497, April.
    • Handle: RePEc:sae:ilrrev:v:56:y:2003:i:3:p:481-497
    DOI: 10.1177/001979390305600307
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    References listed on IDEAS

    as
    1. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 20-43, July.
    2. repec:eee:labchp:v:2:y:1986:i:c:p:1139-1181 is not listed on IDEAS
    3. Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 261-291, April.
    4. Ten Kate, Adriaan, 1992. "Trade liberalization and economic stabilization in Mexico: Lessons of experience," World Development, Elsevier, vol. 20(5), pages 659-672, May.
    5. Cragg, Michael Ian & Epelbaum, Mario, 1996. "Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?," Journal of Development Economics, Elsevier, vol. 51(1), pages 99-116, October.
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