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The Rise and Fall of Income Inequality in Mexico, 1989.2010

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  • Campos, Raymundo
  • Esquivel, Gerardo
  • Lustig, Nora

Abstract

Inequality in Mexico rose between 1989 and 1994 and declined between 1994 and 2010. We examine the role of market forces (demand and supply of labour by skill), institutional factors (minimum wages and unionization rate), and public policy (cash transfers) in explaining changes in inequality. We apply the .re-centred influence function. method to decompose changes in hourly wages into characteristics and returns. The main driver is changes in returns. Returns rose (1989-94) due to institutional factors and labour demand. Returns declined (1994-2006) due to changes in supply and, to a lesser extent, in demand; institutional factors were not relevant. Government transfers contributed to the decline in inequality, especially after 2000.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper WP2012/10.

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Length: 26
Date of creation: 2012
Date of revision:
Handle: RePEc:unu:wpaper:wp2012-10

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Keywords: inequality; wages; disposable income; labour markets; Mexico;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Rise and Fall of Income Inequality in Mexico: 1989-2010
    by Maximo Rossi in Wikiprogress América Latina on 2012-03-12 13:30:00
  2. The Rise and Fall of Income Inequality in Mexico, 1989-2010
    by maximorossi in NEP-LTV blog on 2012-03-23 23:05:59
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Cited by:
  1. Nora Lustig & Luis F. Lopez-Calva & Eduardo Ortiz-Juarez, 2012. "Declining Inequality in Latin America in the 2000s: the Cases of Argentina, Brazil, and Mexico," Working Papers 266, ECINEQ, Society for the Study of Economic Inequality.
  2. Binelli, Chiara, 2014. "How the wage-education profile got more convex: evidence from Mexico," Discussion Paper Series In Economics And Econometrics 1404, Economics Division, School of Social Sciences, University of Southampton.

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