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Trade Liberalization and the Self-employed in Mexico

  • Popli, Gurleen K.

In this paper I examine the trend in income inequality and poverty among the self-employed workers in Mexico over the last two decades (1984?2002). This is the period over which Mexico opened its economy to the global market through trade and investment liberalization. For the first decade following the liberalization, inequality and poverty among the self-employed increased; as the economy stabilized and the country saw economic growth inequality started to go down, but poverty kept increasing. To understand the changes in inequality and poverty I decompose the inequality and poverty indices into within and between group components. Rising returns to skilled labour, regional differences in impact of liberalization and sectoral shifts in employment are important factors in explaining the trends in both inequality and poverty.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2008/rp2008-05.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/05.

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Length: 32 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-05
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  1. Pinelopi K. Goldberg & Nina Pavcnik, 2003. "The Response of the Informal Sector to Trade Liberalization," NBER Working Papers 9443, National Bureau of Economic Research, Inc.
  2. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  3. Zadia M. Feliciano, 2001. "Workers and trade liberalization: The impact of trade reforms in Mexico on wages and employment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(1), pages 95-115, October.
  4. Javier Sánchez-Reaza, 2002. "The Impact of Trade Liberalization on Regional Disparities in Mexico," Growth and Change, Wiley Blackwell, vol. 33(1), pages 72-90.
  5. Moore, Robert L, 1983. "Employer Discrimination: Evidence from Self-Employed Workers," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 496-501, August.
  6. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-33, January.
  7. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  8. Raymond Robertson, 2000. "Trade Liberalisation and Wage Inequality: Lessons from the Mexican Experience," The World Economy, Wiley Blackwell, vol. 23(6), pages 827-849, 06.
  9. Gordon H. Hanson, 2003. "What Has Happened to Wages in Mexico since NAFTA?," NBER Working Papers 9563, National Bureau of Economic Research, Inc.
  10. Eduardo Lora, 2001. "Structural Reforms in Latin America: What Has Been Reformed and How to Measure It," Research Department Publications 4293, Inter-American Development Bank, Research Department.
  11. 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.
  12. Marjit, Sugata & Maiti, Dibyendu S., 2005. "Globalization, Reform and the Informal Sector," Working Paper Series RP2005/12, World Institute for Development Economic Research (UNU-WIDER).
  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. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July.
  15. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  16. Nicita, Alessandro, 2004. "Who benefited from trade liberalization in Mexico? Measuring the effects on household welfare," Policy Research Working Paper Series 3265, The World Bank.
  17. Ravallion, Martin & Huppi, Monika, 1991. "Measuring Changes in Poverty: A Methodological Case Study of Indonesia during an Adjustment Period," World Bank Economic Review, World Bank Group, vol. 5(1), pages 57-82, January.
  18. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
  19. Szekely, Miguel, 1995. "Poverty in Mexico during Adjustment," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(3), pages 331-48, September.
  20. Miguel Székely, 2003. "The 1990s in Latin America: Another Decade of Persistent Inequality, but with Somewhat Lower Poverty," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 317-339, November.
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