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Wage Inequality in Post-Reform Mexico

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Author Info
Chinhui Juhn () (Department of Economics, University of Houston)
Jim Airola () (Naval Postgraduate School)

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Abstract

Using the Mexican Household Income and Expenditure Survey (ENIGH) covering 1984-2000 we analyze wages and employment in Mexico after trade liberalization and domestic reforms. We find that wage inequality and returns to postsecondary schooling increased rapidly during 1984-1994 but stabilized since that period. The end of inequality growth was due to a severe macroeconomic crisis which adversely impacted the better educated, an increase in education levels at the end of the 1990s, and a slowdown in skill demand in the latter half of the 1990s. Between-industry shifts, consistent with trade-based explanations, account for a part of the increase in skill demand during 1984-1994, but these types of movements actually reduced the demand for skill in the latter part of the 1990s. The equalizing impact of trade was offset by within-industry demand shifts which continued to favor more educated workers. The Mexican experience in the 1990s suggests that market-oriented reforms have a sharp initial impact on inequality which dissipates over time. However, the opening of the economy to trade, foreign capital, and global markets also leads to a more long-run increase in the demand for skill.

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Paper provided by Department of Economics, University of Houston in its series Working Papers with number 2005-01.

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Length: 48 pages
Date of creation: Jan 2005
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Handle: RePEc:hou:wpaper:2005-01

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Postal: Houston TX 77023
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  18. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December. [Downloadable!] (restricted)
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Full references

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Moritz, Michael & Gröger, Margit, 2007. "The German-Czech border region after the fall of the Iron Curtain: Effects on the labour market : an empirical study using the IAB Employment Sample (IABS)," IAB Discussion Paper 200701, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  2. Gordon H. Hanson, 2005. "Globalization, Labor Income, and Poverty in Mexico," NBER Working Papers 11027, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Mariano Bosch & Marco Manacorda, 2008. "Minimum Wages and Earnings Inequality in Urban Mexico. Revisiting the Evidence," CEP Discussion Papers dp0880, Centre for Economic Performance, LSE. [Downloadable!]
  4. Sebastian Calonico & Hugo Ñopo, 2008. "Segregación de genero en el trabajo y diferenciales de salario: Evidencia de las zonas urbanas de Mexico 1994-2004," RES Working Papers 4580, Inter-American Development Bank, Research Department. [Downloadable!]
  5. Sebastian Calonico & Hugo Ñopo, 2008. "Gender Segregation in the Workplace and Wage Gaps: Evidence from Urban Mexico 1994-2004," RES Working Papers 4579, Inter-American Development Bank, Research Department. [Downloadable!]
  6. Julio Huato, 2005. "Maquiladoras and Standard of Living in Mexico Before and After NAFTA," Development and Comp Systems 0508006, EconWPA. [Downloadable!]
  7. Moritz, Michael, 2008. "Spatial effects of open borders on the Czech labour market," IAB Discussion Paper 200830, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  8. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," NBER Working Papers 12141, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Fernando Borraz & Jose Ernesto Lopez-Cordova, 2007. "Has Globalization Deepened Income Inequality in Mexico?," Global Economy Journal, International Trade and Finance Association, vol. 7(1), pages 6. [Downloadable!]
  10. Gordon H. Hanson, 2005. "Emigration, Labor Supply, and Earnings in Mexico," NBER Working Papers 11412, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Popli, Gurleen, 2006. "The rising wage inequality in Mexico, 1984-2000: A distributional analysis," MPRA Paper 399, University Library of Munich, Germany, revised 2006. [Downloadable!]
  12. 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. [Downloadable!]
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