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Wage Income Distribution in Mexico: A Nonparametric Approach

Author

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  • Roberto Gallardo Del Angel

    (Facultad de Economía, Universidad Veracruzana.)

Abstract

This paper offers an analysis of wage income inequality for mexico and offers some insights about wel-fare improvements for several categories of workers. We analyze real wage distributions at different points of time, using mainly nonparametric techniques. Kernel densities and smoothing techniques are used to analyze changes in the distribution of wages and labor supply for the first quarters of 2010 and 2020. We also use stochastic dominance analysis to observe welfare improvements for each category of workers and the Wasserstein distance to confirm changes in wage inequality. our main results show that overall wage income inequality decreased, though the change is small and the categories that im-proved are those traditionally considered informal and low human capital workers, such as young people, workers with only elementary education and manufacturing or agricultural workers. The wel-fare of these groups also improved during the same period, yet welfare gains are negative for highly educated and experienced workers with a high level of human capital, including unionized and govern-ment or health sector workers. intra-group wage distribution became more unequal for these workers. The results contradict the technological-bias change found during the initial years of free trade and market reforms in the 1980s and 1990s.

Suggested Citation

  • Roberto Gallardo Del Angel, 2023. "Wage Income Distribution in Mexico: A Nonparametric Approach," Economía: teoría y práctica, Universidad Autónoma Metropolitana, México, vol. 58(1), pages 71-92, Enero-Jun.
    • Handle: RePEc:ety:journl:v:58:y:2023:i:1:p:71-92
    DOI: 10.24275/ETYPUAM/NE/582023/Gallardo
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    References listed on IDEAS

    as
    1. David Fairris & Gurleen Popli & Eduardo Zepeda, 2008. "Minimum Wages and the Wage Structure in Mexico," Review of Social Economy, Taylor & Francis Journals, vol. 66(2), pages 181-208.
    2. Gerardo Esquivel, 2011. "The Dynamics of Income Inequality in Mexico since NAFTA," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2011), pages 155-188, August.
    3. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December.
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    7. Gordon H. Hanson & Ann Harrison, 2022. "Trade Liberalization And Wage Inequality In Mexico," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 3, pages 43-60, World Scientific Publishing Co. Pte. Ltd..
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    10. Campos Vázquez, Raymundo Miguel & Rodas Milián, James Alexis, 2020. "El efecto faro del salario mínimo en la estructura salarial: evidencias para México," El Trimestre Económico, Fondo de Cultura Económica, vol. 87(345), pages 51-97, enero-mar.
    11. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
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    More about this item

    Keywords

    Wage inequality; technological-bias change; welfare gains;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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