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Globalization, Labor Income, and Poverty in Mexico

  • Gordon H. Hanson

In this paper, I examine changes in the distribution of labor income across regions of Mexico during the country's decade of globalization in the 1990's. I focus the analysis on men born in states with either high-exposure or low-exposure to globalization, as measured by the share of foreign direct investment, imports, or export assembly in state GDP. Controlling for regional differences in the distribution of observable characteristics and for initial differences in regional incomes, the distribution of labor income in high-exposure states shifted to the right relative to the distribution of income in low-exposure states. This change was primarily the result of a shift in mass in the income distribution for low-exposure states from upper-middle income earners to lower income earners. Labor income in low-exposure states fell relative to high-exposure states by 10% and the incidence of wage poverty (the fraction of wage earners whose labor income would not sustain a family of four at above-poverty consumption levels) in low-exposure states increased relative to high-exposure states by 7%.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11027.

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Date of creation: Jan 2005
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Publication status: published as Globalization, Labor Income, and Poverty in Mexico , Gordon H. Hanson. in Globalization and Poverty , Harrison. 2007
Handle: RePEc:nbr:nberwo:11027
Note: ITI
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  1. repec:cup:cbooks:9780521296762 is not listed on IDEAS
  2. repec:rus:hseeco:121565 is not listed on IDEAS
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