Rising Wage Inequality in Mexico: Structural Reforms or Changing Labor Market Institutions?
AbstractOver the period of the mid-1980s to the mid-1990s Mexico experienced a significant increase in wage inequality. The literature has typically attributed this rise in inequality to trade liberalization and foreign direct investment. We argue, however, that a better explanation can be found in the changing labor market institutions such as declining union power and the declining real value of the minimum wage. We offer evidence to suggest that these domestic institutional changes have indeed contributed to growing wage inequality, and show that the timing of these institutional changes better matches the trajectory of wage inequality in Mexico than does the timing of reforms.
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Bibliographic InfoPaper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2005016.
Length: 33 pages
Date of creation: Nov 2005
Date of revision: Nov 2005
Wage inequality; Structural reforms; Labor Market Institutions; Mexico.;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
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