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Inequality and Mexico's Labor Market after Trade Reform

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  • Bouillon, César P.

Abstract

The main purpose of this paper is to measure the contributions of the changes in the labor market to the increase in inequality experienced by Mexico after the 1985 trade and financial liberalization. To do so, the paper uses data from Mexican household surveys (Encuesta Nacional de Ingreso Gasto de los Hogares de México) produced by the Mexican Institute for Statistics, Geography and Informatics (Instituto Nacional de Estadística, Geografía e Informática) for 1984 and 1994. The paper applies a counterfactual methodology to measure the effects on inequality of changes in labor force participation, unemployment, structure of employment, and mean labor income by economic sector and education level.

Suggested Citation

  • Bouillon, César P., 2000. "Inequality and Mexico's Labor Market after Trade Reform," IDB Publications (Working Papers) 3782, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:3782
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    References listed on IDEAS

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    1. Tan, Hong & Batra, Geeta, 1997. "Technology and Firm Size-Wage Differentials in Colombia, Mexico, and Taiwan (China)," The World Bank Economic Review, World Bank, vol. 11(1), pages 59-83, January.
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    3. Borjas, George J. & Freeman, Richard B. (ed.), 1992. "Immigration and the Work Force," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226066332.
    4. Eduardo Lora & Gustavo Márquez, 1998. "The Employment Problem in Latin America: Perceptions and Stylized Facts," Research Department Publications 4114, Inter-American Development Bank, Research Department.
    5. César P. Bouillon, 2000. "Returns to Education, Sector Premiums, and Male Wage Inequality in Mexico," IDB Publications (Working Papers) 51038, Inter-American Development Bank.
    6. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    7. Bouillon, César P., 2000. "Returns to Education, Sector Premiums, and Male Wage Inequality in Mexico," IDB Publications (Working Papers) 3793, Inter-American Development Bank.
    8. Lora, Eduardo & Olivera, Mauricio, 1998. "Macro Policy and Employment Problems in Latin America," IDB Publications (Working Papers) 6077, Inter-American Development Bank.
    9. Robbins, Donald J., 1996. "Hos Hits Facts: Facts Win Evidence On Trade And Wages In The Developing World," Harvard Institute for International Development (HIID) Papers 294374, Harvard University, Kennedy School of Government.
    10. 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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    12. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    13. Ros, Jaime, 1993. "La reforma del régimen comercial en México durante los años ochenta: sus efectos económicos y dimensiones políticas," Series Históricas 9390, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    14. George J. Borjas & Richard B. Freeman, 1992. "Immigration and the Work Force: Economic Consequences for the United States and Source Areas," NBER Books, National Bureau of Economic Research, Inc, number borj92-1.
    15. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," The World Bank Economic Review, World Bank, vol. 11(1), pages 17-32, January.
    16. 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.
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    Cited by:

    1. Raymundo M. Campos-Vázquez & Nora Lustig, 2017. "Labour income inequality in Mexico: Puzzles solved and unsolved," WIDER Working Paper Series wp-2017-186, World Institute for Development Economic Research (UNU-WIDER).
    2. Raymundo M. Campos-Vázquez & Nora Lustig & John Scott, 2018. "Inequality in Mexico: Labour markets and fiscal redistribution 1989-2014," WIDER Working Paper Series wp-2018-188, World Institute for Development Economic Research (UNU-WIDER).
    3. Bouillon, César P., 2000. "Returns to Education, Sector Premiums, and Male Wage Inequality in Mexico," IDB Publications (Working Papers) 3793, Inter-American Development Bank.
    4. López-Calva, Luis Felipe & Levy Algazi, Santiago, 2016. "Labor Earnings, Misallocation, and the Returns to Education in Mexico," IDB Publications (Working Papers) 7454, Inter-American Development Bank.
    5. Raymundo Campos-Vázquez & Nora Lustig & John Scott, 2018. "Inequality in Mexico: Labour markets and fiscal redistribution 1989–2014," WIDER Working Paper Series 188, World Institute for Development Economic Research (UNU-WIDER).
    6. Raymundo M. Campos-Vazquez & Nora Lustig, 2017. "Labour income inequality in Mexico: Puzzles solved and unsolved," Working Papers 1719, Tulane University, Department of Economics.

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