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Trade Liberalization and the Self-employed in Mexico

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Author Info
Popli, Gurleen K.

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Abstract

In this paper I examine the trend in income inequality and poverty among the self-employed workers in Mexico over the last two decades (1984?2002). This is the period over which Mexico opened its economy to the global market through trade and investment liberalization. For the first decade following the liberalization, inequality and poverty among the self-employed increased; as the economy stabilized and the country saw economic growth inequality started to go down, but poverty kept increasing. To understand the changes in inequality and poverty I decompose the inequality and poverty indices into within and between group components. Rising returns to skilled labour, regional differences in impact of liberalization and sectoral shifts in employment are important factors in explaining the trends in both inequality and poverty.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2008/rp2008-05.pdf
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Publisher Info
Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number RP2008/05.

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Length: 32 pages
Date of creation: 2008
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Handle: RePEc:unu:wpaper:rp2008-05

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Related research
Keywords: income inequality; poverty; Shapley?Shorrocks decomposition; self-employed; Mexico;

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  1. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December. [Downloadable!] (restricted)
  2. Javier Sánchez-Reaza, 2002. "The Impact of Trade Liberalization on Regional Disparities in Mexico," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 33(1), pages 72-90. [Downloadable!] (restricted)
  3. Zadia M. Feliciano, 2001. "Workers and trade liberalization: The impact of trade reforms in Mexico on wages and employment," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 55(1), pages 95-115, October.
  4. Nissanke, Machiko & Thorbecke, Erik, 2007. "Linking Globalization to Poverty," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  5. Gordon H. Hanson, 2003. "What Has Happened to Wages in Mexico since NAFTA?," NBER Working Papers 9563, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September. [Downloadable!] (restricted)
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  7. 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 S20-43, July. [Downloadable!] (restricted)
  8. Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2003. "The Response of the Informal Sector to Trade Liberalization," CEPR Discussion Papers 3874, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-33, January. [Downloadable!] (restricted)
  10. Szekely, Miguel, 1995. "Poverty in Mexico during Adjustment," Review of Income and Wealth, Blackwell Publishing, vol. 41(3), pages 331-48, September.
  11. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(2), pages 271-288, January.
  12. 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. [Downloadable!] (restricted)
  13. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May. [Downloadable!] (restricted)
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  14. Raymond Robertson, 2000. "Trade Liberalisation and Wage Inequality: Lessons from the Mexican Experience," The World Economy, Blackwell Publishing, vol. 23(6), pages 827-849, 06. [Downloadable!] (restricted)
  15. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  16. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," World Bank Economic Review, Oxford University Press, vol. 5(1), pages 57-82, January.
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