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Essays on development and labour economics for Mexico

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  • Orraca Romano, Pedro Paulo

Abstract

This thesis is composed of three empirical essays that analyse different development and labour economics issues about Mexico and its emigrant population residing in the United States. The first essay examines the role of occupational segregation in explaining the low wages among first, second and third generation Mexican immigrants in the United States. Mexican-Americans earn lower wages than blacks mainly because they possess less human capital. With respect to whites, their lower wages are also a product of their smaller rewards for skills and underrepresentation at the top of the occupational structure. Occupational segregation constitutes an important part of the wage gap between natives and Mexican-born immigrants. For subsequent generations, the contribution of occupational segregation to the wage gap varies significantly between groups and according to the decomposition used. The second essay examines whether Seguro Popular, a free-of-charge publicly provided health insurance program for otherwise uninsured households, crowded-out private transfers in Mexico. Using data from the National Household Income and Expenditure Survey, the effects of Seguro Popular are identified using the spatial variation in the program’s coverage induced by its sequential roll-out throughout Mexico. The results show that Seguro Popular reduced on average a household’s probability of receiving private transfers by 5.55 percentage points. This finding appears to be driven by domestic private transfers, since the program’s effects are only statistically significant for private transfers originating within Mexico. In addition, Seguro Popular had a weak and not statistically significant negative effect on the amount of private transfers received. Failure to take into account possible changes in private behaviour induced by Seguro Popular may overstate the program’s potential benefits or distributional impacts. Finally, the third essay studies the effect of students’ exposure to violent crimes on educational outcomes. Driven by drug-trade related crimes, homicide levels in Mexico have dramatically increased since 2007. Using school level data, a panel of Mexico’s primary and secondary schools from 2006 to 2012 is constructed to analyse the effect of exposure to homicides on standardised test scores and grade failure rates. The results show that a one-unit increase in the number of homicides per 10,000 inhabitants reduces average test scores between 0.0035 and 0.0142 standard deviations. This effect is larger in secondary schools, stronger if the homicide occurs closer to the examination date, and is stable when using either total homicides or drug-trade related homicides to measure crime. Higher homicides rates are also associated with an increase in the grade failure rate. Early exposure to homicides has potential long-term consequences since it may affect educational attainment levels and future income streams.

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  • Orraca Romano, Pedro Paulo, 2016. "Essays on development and labour economics for Mexico," Economics PhD Theses 0816, Department of Economics, University of Sussex Business School.
    • Handle: RePEc:sus:susphd:0816
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