Regional inequality in Mexico’s central region. An exploratory spatial analysis of the productivity at the municipal level during 1988-2003

This essay employs nonparametric and spatial techniques commonly used in the Spatial Economics literature to study the labor productivity of the central region of Mexico at the municipio (county) level. In particular, we measure the spatial autocorrelation of the labor productivity and use a spatial approach to study the intra-distributional changes of the productivity. The results show that the labor productivity reveals strong local disparities and spatial dependency across municipios. When subregions are defined by the spatial autocorrelation of labor productivity, it is found that the central region of Mexico has maintained a strong polarization between rich (the metropolitan area of Mexico City) and poor regions (south of Puebla). It is also found that new regions such as the new dynamic corridor Puebla-Tlaxcala-Apizaco and Toluca’s valley have emerged. The spatial results of this essay can be related to the findings of other regional studies that detect a spatial refunctionalization of the manufacture activities, migration flows and sub-metropolitan regions in the central region of Mexico since the beginning of the liberalization process. This essay concludes that the recent territorial changes of the region, independently of their causes, have kept labor productivity with strong spatial dependency and regional inequality.