Is the impact of public investment neutral across the regional income distribution? Evidence from Mexico

This paper investigates the contribution of public investment to the reduction of regional inequalities, with a specific application to Mexico. We use quantile regressions to examine the impact of public investment on regional disparities according to the position of each region in the conditional distribution of regional income. Results confirm the hypothesis that regional inequalities can indeed be attributed to the regional distribution of public investment, where the observed pattern shows that public investment mainly helped to reduce regional inequalities between the richest regions.regional development, quantile regression, public investment

Effects of the 2008-09 economic crisis on labor markets in Mexico

The 2008-09 economic crisis has had a long-lasting negative impact on the Mexican economy. This paper examines labor market dynamics in Mexico in light of the crisis. The labor market has been characterized in recent years by low relative unemployment, but high levels of informal jobs, low-growth, and almost stagnant real wages. In this context, the crisis destroyed a wide number of formal jobs, and even informal, increasing the unemployment rates to pre-crisis levels. Manufacturing was the sector that endured the largest job losses during the crisis and wages decreased for all sectors. The government of Mexico implemented a variety of programs to cope with the crises. However, these measures were too limited to counteract the large negative impact of the crisis on labor markets.Labor Markets,Labor Policies,Population Policies,Labor Standards,Economic Theory&Research

Political competition and the allocation of public investment in Mexico

This paper examines the causality between central government spending in regions and local elections, in an environment of increasing electoral competition and a undefined decentralisation. This study examines Mexican elections during the period 1990-1995 where the main party started loosing part of its influence and there were many claims of use of the budget to favour the central governing party. We employ data on public investment and municipalities ruled by the PRI in each Mexican region. The evidence shows that there is opportunistic behaviour of the central government using public investment to gain local control of pressures for decentralisation.

Spillover Effects of Homicides across Mexican Municipalities: A Spatial Regime Model Approach

This paper investigates spatial diffusion patterns of high levels of violence across Mexican municipalities to nearby locations while also exploring the possible effect of increasing law enforcement resources in some regions of the country. Our approach consists of providing a framework based on spatial regime models to address spatial heterogeneity that indicates instability in the structural determinants of homicides. In this context, a distinction is made in relation to the regimes that are analyzed between those municipalities that were exposed to joint operations (‘operativos conjuntos’) and those that were not exposed to the operations. Spatial econometric models were estimated for each regime in light of investigating possible spillover effects arising from the covariates. The results point to differences in regard to the significance, magnitude, and sign of the effects related to some variables according to each spatial regime’s specification. While the direct effects show that socioeconomic variables tend to play an important role in explaining the variation of homicides in the non-joint operation regime, the historical level of homicides and closeness to the U.S. border operate in a more significant way for those municipalities in the joint operation regime. In regard to the indirect effects estimates, a positive and significant spillover effect upon homicide rates is attributed to our law enforcement variable as well as to the proxy variable of informality. These spillover effects are found to be greater in magnitude especially in those municipalities exposed to joint operations

Spillover Effects of Homicides across Mexican Municipalities: A Spatial Regime Model Approach

This paper investigates spatial diffusion patterns of high levels of violence across Mexican municipalities to nearby locations while also exploring the possible effect of increasing law enforcement resources in some regions of the country. Our approach consists of providing a framework based on spatial regime models to address spatial heterogeneity that indicates instability in the structural determinants of homicides. In this context, a distinction is made in relation to the regimes that are analyzed between those municipalities that were exposed to joint operations (‘operativos conjuntos’) and those that were not exposed to the operations. Spatial econometric models were estimated for each regime in light of investigating possible spillover effects arising from the covariates. The results point to differences in regard to the significance, magnitude, and sign of the effects related to some variables according to each spatial regime’s specification. While the direct effects show that socioeconomic variables tend to play an important role in explaining the variation of homicides in the non-joint operation regime, the historical level of homicides and closeness to the U.S. border operate in a more significant way for those municipalities in the joint operation regime. In regard to the indirect effects estimates, a positive and significant spillover effect upon homicide rates is attributed to our law enforcement variable as well as to the proxy variable of informality. These spillover effects are found to be greater in magnitude especially in those municipalities exposed to joint operations

Imputación de ingresos laborales: Una aplicación con encuestas de empleo en México

The aim of this paper is to make imputation of earnings in observations with missing values in the Encuesta Nacional de Ocupaciones y Empleo (ENOE), and also to analyze a possible bias in human capital estimations from ignoring such missings. We present imputations by two methods, and also a correction for estimations by reweighting observations with reported earnings. The results show differences in human capital estimations on wages and factors related to labor poverty when missing values of earnings are ignored. Differences are acute when measuring labor poverty

Measuring a Territorial Labor Market Development Index

There is a widespread debate on the importance of the quality of labor, which is the requirement for wages to cover basic needs and provide people with a decent way of life and fostering development at the same time. This paper proposes to measure a labor market development index, using variables that can usually be found in labor surveys and can be applied for regional and country comparisons with easiness of aggregation through geometric means. We consider three principal pillars that make of labor one of the main mechanics for development: equality, productivity, and welfare

Are Regional Inequalities Decreasing with Public Investment? Evidence from Mexico

http://www.iue.it/RSCAS/WP-Texts/02_19.pd