Template-Type: ReDIF-Paper 1.0
Author-Name:  Chinhui Juhn
Author-X-Name-First: Chinhui
Author-X-Name-Last: Juhn
Author-Email:  cjuhn@uh.edu
Author-Workplace-Name: Department of Economics, University of Houston
Author-Name:  Jim Airola	
Author-X-Name-First: Jim
Author-X-Name-Last: Airola
Author-Workplace-Name: Naval Postgraduate School
Author-Email: jsairola@nps.edu
Title:  Wage Inequality in Post-Reform Mexico
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.
Length:  48 pages
Creation-Date:  2005-01
File-URL: http://www.uh.edu/econpapers/RePEc/hou/wpaper/2005-01.pdf
File-Format: Application/pdf
Number: 2005-01
Classification-JEL: 
Keywords: 
Handle: RePEc:hou:wpaper:2005-01