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The Mexican Wage Curve 2000-2003: A Quantile Analysis

  • Hector Elias Gutierrez Rufrancos

    (Department of Economics, University of Sussex)

This paper exploits the Mexican Encuesta Nacional de Empleo Urbano (ENEU) to determine the existence of the wage curve|an empirical phenomena rst suggested by Blanch ower and Oswald (1990)|during the period 2000{2003. We propose an innovative approach to the wage curve by estimating the elasticity across the wage dis- tribution. This is applied to the Mexican experience during the early 2000s recession. The evidence indicates that for Mexico during this period there is no wage curve, and that wages are positively a ected by local levels of unemployment. This lends credi- bility to the Harris and Todaro (1970) view which suggests that there is segmentation in the labour market with residual unemployment. We argue that perhaps the power of unions may account for our fndings.

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Paper provided by Department of Economics, University of Sussex in its series Working Paper Series with number 3412.

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Date of creation: Jun 2012
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Handle: RePEc:sus:susewp:3412
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  1. David Fairris, 2006. "Union Voice Effects in Mexico," British Journal of Industrial Relations, London School of Economics, vol. 44(4), pages 781-800, December.
  2. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
  3. Mariano Bosch & William Maloney, 2006. "Gross worker flows in the presence of informal labor markets. The Mexican experience 1987-2002," LSE Research Online Documents on Economics 19798, London School of Economics and Political Science, LSE Library.
  4. Gordon Dahl, 1997. "Mobility and the Returns to Education: Testing A Roy Model With Multiple Markets," Working Papers 760, Princeton University, Department of Economics, Industrial Relations Section..
  5. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
  6. Ramos, Raul & Duque, Juan Carlos & Surinach, Jordi, 2009. "Is the Wage Curve Formal or Informal? Evidence for Colombia," IZA Discussion Papers 4461, Institute for the Study of Labor (IZA).
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  8. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  9. Janine Berg & Dante Contreras, 2004. "Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 151-165.
  10. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  11. Christian Lévesque & Gregor Murray, 2005. "Union Involvement in Workplace Change: A Comparative Study of Local Unions in Canada and Mexico," British Journal of Industrial Relations, London School of Economics, vol. 43(3), pages 489-514, 09.
  12. Pradhan, Menno & van Soest, Arthur, 1995. "Formal and informal sector employment in urban areas of Bolivia," Labour Economics, Elsevier, vol. 2(3), pages 275-297, September.
  13. 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.
  14. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, October.
  15. Leonardo Gasparini & Leopoldo Tornarolli, 2007. "Labor Informality in Latin America and the Caribbean: Patterns and Trends from Household Survey Microdata," CEDLAS, Working Papers 0046, CEDLAS, Universidad Nacional de La Plata.
  16. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, 07.
  17. Fairris, David & Levine, Edward, 2004. "La disminución del poder sindical en México," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(284), pages 847-876, octubre-d.
  18. Bosch, Mariano & Manacorda, Marco, 2010. "Minimum Wages and Earnings Inequality in Urban Mexico," CEPR Discussion Papers 7882, C.E.P.R. Discussion Papers.
  19. Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30.
  20. Partridge, Mark D. & Rickman, Dan S., 1997. "Has the wage curve nullified the Harris-Todaro model? Further US evidence," Economics Letters, Elsevier, vol. 54(3), pages 277-282, July.
  21. repec:dgr:kubcen:200046 is not listed on IDEAS
  22. Bosch, Mariano & Maloney, William F., 2007. "Comparative Analysis of Labor Market Dynamics Using Markov Processes: An Application to Informality," IZA Discussion Papers 3038, Institute for the Study of Labor (IZA).
  23. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, 02.
  24. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
  25. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-87, January.
  26. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
  27. repec:ner:tilbur:urn:nbn:nl:ui:12-80489 is not listed on IDEAS
  28. David Fairris, 2003. "Unions and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(3), pages 481-497, April.
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