Wage Inequality and the Gender Wage Gap in Mexico

Using data from the Urban Employment Survey, this article shows that the gender wage gap in Mexico decreased from 1988 to 1996, and that it raised from 1996 to 1998, either if it is measured as the mean wage differential, or as the differential at different points of the wage distributions. The study tries to distinguish among the reasons behind these changes, given that the Mexican economy has experienced an increase in wage inequality between skilled and unskilled workers, and that Mexican women are acquiring more formal education and are participating more in the labor force. The analysis shows that wage inequality within gender groups increased between 1988 and 1996, and that it decreased between 1996 and 1998. The analysis also shows that wage inequality was higher within the male group until 1996, but from 1996 to 1998, wage inequality is larger for the female labor force. Using a decomposition analysis, the article shows that gender specific factors worked for a drop in the gender pay gap until 1996, and that they worked against it in the 1996- 1998 period. The analysis also shows that male wage inequality worked against the gender wage gap until 1996, and that it worked for it in the 1996-1998 period.