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Rising Wage Inequality in Mexico: Structural Reforms or Changing Labor Market Institutions?

Author

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  • Gurleen Popli

    (Department of Economics, The University of Sheffield)

Abstract

Over the period of the mid-1980s to the mid-1990s Mexico experienced a significant increase in wage inequality. The literature has typically attributed this rise in inequality to trade liberalization and foreign direct investment. We argue, however, that a better explanation can be found in the changing labor market institutions such as declining union power and the declining real value of the minimum wage. We offer evidence to suggest that these domestic institutional changes have indeed contributed to growing wage inequality, and show that the timing of these institutional changes better matches the trajectory of wage inequality in Mexico than does the timing of reforms.

Suggested Citation

  • Gurleen Popli, 2005. "Rising Wage Inequality in Mexico: Structural Reforms or Changing Labor Market Institutions?," Working Papers 2005016, The University of Sheffield, Department of Economics, revised Nov 2005.
    • Handle: RePEc:shf:wpaper:2005016
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    File URL: http://www.shef.ac.uk/content/1/c6/03/91/72/SERP2005016.pdf
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    File URL: http://www.shef.ac.uk/content/1/c6/03/91/72/SERP2005016.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Gordon Betcherman, 2012. "Labor Market Institutions : A Review of the Literature," World Bank Publications - Reports 12139, The World Bank Group.
    2. Bosch, Mariano & Manacorda, Marco, 2008. "Minimum wages and earnings inequality in urban Mexico. Revisiting the evidence," LSE Research Online Documents on Economics 19561, London School of Economics and Political Science, LSE Library.
    3. José Raúl Luyando Cuevas, 2013. "Desigualdad salarial antes y durante la apertura comercial mexicana," Revista Lebret, Universidad Santo Tomás - Bucaramanga, vol. 5, pages 29-50, December.

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    More about this item

    Keywords

    Wage inequality; Structural reforms; Labor Market Institutions; Mexico.;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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