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The dynamics of income inequality in Mexico since NAFTA

  • Gerardo Esquivel

    ()

    (El Colegio de México)

This paper reviews the pattern of income inequality in Mexico since 1994. It shows that in the past few years there has been an important reduction of income inequality in Mexico, which has almost reverted the sharp increase in inequality observed between 1984 and 1994. Using a Gini decomposition exercise we conclude that labor income, transfers and remittances have all played an important role in this process. We also argue that the equalizing effect of labor income and the reduction of wage inequality in Mexico can be explained by a structural change in Mexico‟s workforce composition in terms of education and experience. In general, we conclude that the recent reduction of inequality in Mexico is due to the interaction of both, the market and the State.

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File URL: http://cee.colmex.mx/documentos/documentos-de-trabajo/2010/dt20109.pdf
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Paper provided by El Colegio de México, Centro de Estudios Económicos in its series Serie documentos de trabajo del Centro de Estudios Económicos with number 2010-09.

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Date of creation: Nov 2010
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Handle: RePEc:emx:ceedoc:2010-09
Contact details of provider: Web page: http://www.colmex.mx/centros/cee/
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  1. Esquivel, Gerardo & Rodriguez-Lopez, Jose Antonio, 2003. "Technology, trade, and wage inequality in Mexico before and after NAFTA," Journal of Development Economics, Elsevier, vol. 72(2), pages 543-565, December.
  2. Airola, Jim & Juhn, Chinhui, 2005. "Wage Inequality in Post-Reform Mexico," IZA Discussion Papers 1525, Institute for the Study of Labor (IZA).
  3. Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-40, September.
  4. Atolia, Manoj, 2007. "Trade liberalization and rising wage inequality in Latin America: Reconciliation with HOS theory," Journal of International Economics, Elsevier, vol. 71(2), pages 467-494, April.
  5. Eric Verhoogen, 2007. "Trade, quality upgrading and wage inequality in the Mexican manufacturing sector," Discussion Papers 0607-08, Columbia University, Department of Economics.
  6. Aaron Tornell & Gerardo Esquivel, 1995. "The Political Economy of Mexico's Entry to NAFTA," NBER Working Papers 5322, National Bureau of Economic Research, Inc.
  7. Guillermo Cruces & Leonardo Gasparini, 2008. "A Distribution in Motion: The Case of Argentina," CEDLAS, Working Papers 0078, CEDLAS, Universidad Nacional de La Plata.
  8. Fairris, David & Popli, Gurleen & Zepeda, Eduardo, 2006. "Minimum wages and wage structure in Mexico," MPRA Paper 400, University Library of Munich, Germany, revised 2006.
  9. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
  10. Daniel Chiquiar, 2004. "Globalization, Regional Wage Differentials and the Stolper-Samuelson Theorem: Evidence from México," Working Papers 2004-06, Banco de México.
  11. Pablo Acosta & Gabriel V. Montes-Rojas, 2008. "Trade Reform and Inequality: The Case of Mexico and Argentina in the 1990s," The World Economy, Wiley Blackwell, vol. 31(6), pages 763-780, 06.
  12. Ana Corbacho & Gerd Schwartz, 2002. "Mexico; Experiences with Pro-Poor Expenditure Policies," IMF Working Papers 02/12, International Monetary Fund.
  13. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
  14. Leonardo Gasparini & Guillero Cruces & Leopoldo Tornarolli, 2011. "Recent Trends In Income Inequality In Latin America," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  15. Raymond Robertson, 2007. "Trade and Wages: Two Puzzles from Mexico," The World Economy, Wiley Blackwell, vol. 30(9), pages 1378-1398, 09.
  16. Ferreira, Francisco H. G. & Leite, Phillippe G. & Wai-Poi, Matthew, 2007. "Trade liberalization, employment flows, and wage inequality in Brazil," Policy Research Working Paper Series 4108, The World Bank.
  17. Cesar Patricio Bouillon & Arianna Legovini & Nora Lustig, 2003. "Rising Inequality in Mexico: Household Characteristics and Regional Effects," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 112-133.
  18. Lopez-Acevedo, Gladys, 2006. "Mexico : two decades of the evolution of education and inequality," Policy Research Working Paper Series 3919, The World Bank.
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