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Inequality and Mexico's Labor Market after Trade Reform

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  • César P. Bouillon

Abstract

The main purpose of this paper is to measure the contributions of the changes in the labor market to the increase in inequality experienced by Mexico after the 1985 trade and financial liberalization. To do so, the paper uses data from Mexican household surveys (Encuesta Nacional de Ingreso Gasto de los Hogares de México) produced by the Mexican Institute for Statistics, Geography and Informatics (Instituto Nacional de Estadística, Geografía e Informática) for 1984 and 1994. The paper applies a counterfactual methodology to measure the effects on inequality of changes in labor force participation, unemployment, structure of employment, and mean labor income by economic sector and education level.

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Bibliographic Info

Paper provided by Inter-American Development Bank in its series IDB Publications with number 53718.

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Date of creation: Oct 2000
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Handle: RePEc:idb:brikps:53718

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Keywords: Population Statistics & Information Systems; Trade Facilitation; Trade Agreements; Labor Policy; Workforce & Employment; Income; Consumption & Saving; financial liberalization; structure of employment; employment; unemployment; inequality; labor market;

References

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  1. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
  2. George J. Borjas & Richard B. Freeman, 1992. "Immigration and the Workforce: Economic Consequences for the United States and Source Areas," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number borj92-1.
  3. 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, Elsevier, vol. 51(1), pages 99-116, October.
  4. Eduardo Lora & Gustavo Márquez, 1998. "The Employment Problem in Latin America: Perceptions and Stylized Facts," IDB Publications, Inter-American Development Bank 6437, Inter-American Development Bank.
  5. Eduardo Lora & Mauricio Olivera, 1998. "Macro Policy and Employment Problems in Latin America," IDB Publications, Inter-American Development Bank 6438, Inter-American Development Bank.
  6. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers, National Bureau of Economic Research, Inc 5122, National Bureau of Economic Research, Inc.
  7. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," World Bank Economic Review, World Bank Group, World Bank Group, vol. 11(1), pages 17-32, January.
  8. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  9. Tan, Hong & Batra, Geeta, 1997. "Technology and Firm Size-Wage Differentials in Colombia, Mexico, and Taiwan (China)," World Bank Economic Review, World Bank Group, World Bank Group, vol. 11(1), pages 59-83, January.
  10. César P. Bouillon, 2000. "Returns to Education, Sector Premiums, and Male Wage Inequality in Mexico," IDB Publications, Inter-American Development Bank 51038, Inter-American Development Bank.
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