The rising wage inequality in Mexico, 1984-2000: A distributional analysis

In this paper we look at the distribution of wages to examine the extent and cause of the increasing wage inequality in Mexico over the last two decades (1984 to 2000). To understand the causes of the increase in inequality over time we do a counterfactual analysis. We find that over the last two decades not only did the inequality increase, there also was an erosion of real wages, and it's the middle class which was affected the most. Main reason for the decrease in real wages was the declining unionization in the country. While the main reason for the rise in inequality was the changing distribution of skills.kernel density estimation; counterfactual distribution ; unions; trade liberalization; changing distribution of skills

Trade Liberalization and the Self-employed in Mexico

In this paper I examine the trend in income inequality and poverty among the self-employed workers in Mexico over the last two decades (1984?2002). This is the period over which Mexico opened its economy to the global market through trade and investment liberalization. For the first decade following the liberalization, inequality and poverty among the self-employed increased; as the economy stabilized and the country saw economic growth inequality started to go down, but poverty kept increasing. To understand the changes in inequality and poverty I decompose the inequality and poverty indices into within and between group components. Rising returns to skilled labour, regional differences in impact of liberalization and sectoral shifts in employment are important factors in explaining the trends in both inequality and poverty.income inequality, poverty, Shapley?Shorrocks decomposition, self-employed, Mexico

Minimum wages and wage structure in Mexico

Instead of merely setting a lower bound on the wages of formal sector workers, minimum wages serve as a norm for wage setting more generally throughout the Mexican economy. Our results suggest that wages are commonly set at multiples of the minimum wage, and that changes in minimum wages influence wage changes across the occupational distribution. Moreover, our findings suggest that these normative features of minimum wages have their greatest impact on the mid-to-lower tail of the wage distribution, including the informal sector of the economy. Thus, the results lend support to the view that declining real minimum wages and stabilization programs that strengthened the link between wage levels, wage changes, and minimum wages, might account for a portion of the growing wage inequality in Mexico over the period of the late 1980s and early 1990s.wage distributions; minimum wages; wage inequality; Mexico

Persistent Poverty and Children's Cognitive Development: Evidence from the UK Millennium Cohort Study

We use data from the four sweeps of the UK Millennium Cohort Study (MCS) of children born at the turn of the century to document the impact that poverty, and in particular persistent poverty, has on their cognitive development in their early years. Using Structural Equation Modelling (SEM), we show that children born into poverty have significantly lower test scores at age 3, age 5 and age 7, and that continually living in poverty in their early years has a cumulative negative impact on their cognitive development. For children who are persistently in poverty throughout their early years, their cognitive development test scores at age 7 are more than 20 percentile ranks lower than children who have never experienced poverty, even after controlling for a wide range of background characteristics and parenting investment.child poverty, cognitive development

The rising wage inequality in Mexico, 1984-2000: A distributional analysis

In this paper we look at the distribution of wages to examine the extent and cause of the increasing wage inequality in Mexico over the last two decades (1984 to 2000). To understand the causes of the increase in inequality over time we do a counterfactual analysis. We find that over the last two decades not only did the inequality increase, there also was an erosion of real wages, and it's the middle class which was affected the most. Main reason for the decrease in real wages was the declining unionization in the country. While the main reason for the rise in inequality was the changing distribution of skills

The rising wage inequality in Mexico, 1984-2000: A distributional analysis

In this paper we look at the distribution of wages to examine the extent and cause of the increasing wage inequality in Mexico over the last two decades (1984 to 2000). To understand the causes of the increase in inequality over time we do a counterfactual analysis. We find that over the last two decades not only did the inequality increase, there also was an erosion of real wages, and it's the middle class which was affected the most. Main reason for the decrease in real wages was the declining unionization in the country. While the main reason for the rise in inequality was the changing distribution of skills

Maturing Capitalism And Economic Stabilization: International Evidence

Recent literature has found that the US business cycle has experienced a substantial decrease in volatility since the mid-1980s.  Most authors have considered this as a recent phenomenon particular to the US, which narrows the search for potential causes.  In this paper we go one step further and investigate whether this recent change is unique to the US and a phenomenon particular to the 1980s alone or if this is part of a long run trend in volatility shared by several countries.  In particular, we examine whether maturing capitalism has engendered a continuous stabilization of business cycles in eleven industrialized countries over time.  We do not try to quantify changes in volatility pre and post-War, which could be compromised by differences in the quality of the data.  Instead, we focus on examining structural changes in the long run trend of volatility in these countries.  Recursive stabilization tests are applied to examine breaks in the volatility of production in these countries, assuming that their dates are unknown.  We find strong evidence of multiple structural breaks leading to more stability in these countries over time, and that the recent decrease in US output volatility is part of a broader long-term trend shared by all industrialized countries studied

Minimum wages and wage structure in Mexico

Instead of merely setting a lower bound on the wages of formal sector workers, minimum wages serve as a norm for wage setting more generally throughout the Mexican economy. Our results suggest that wages are commonly set at multiples of the minimum wage, and that changes in minimum wages influence wage changes across the occupational distribution. Moreover, our findings suggest that these normative features of minimum wages have their greatest impact on the mid-to-lower tail of the wage distribution, including the informal sector of the economy. Thus, the results lend support to the view that declining real minimum wages and stabilization programs that strengthened the link between wage levels, wage changes, and minimum wages, might account for a portion of the growing wage inequality in Mexico over the period of the late 1980s and early 1990s

Examining the Link between Crime and Unemployment: A Time Series Analysis for Canada

We use national and regional Canadian data to analyse the relationship between economic activity (as reflected by the unemployment rate) and crime rates. Given potential aggregation bias, we disaggregate the crime data and look at the relationship between six different types of crimes rates and unemployment rate; we also disaggregate the data by region. We employ an error correction model in our analysis to test for short-run and long-run dynamics. We find no evidence of long-run relationship between crime and unemployment, when we look at both disaggregation by type of crime and disaggregation by region. Lack of evidence of a long-run relationship indicates we have no evidence of the motivation hypothesis. For selected types of property crimes, we find some evidence of a significant negative short-run relationship between crime and unemployment, lending support to the opportunity hypothesis. Inclusion of control variables in the panel analysis does not alter the findings, qualitatively or quantitatively

Parental ethnic identity and child test scores

We examine the relationship between parental ethnic identity and the test scores of ethnic minority children. We use standard survey measures of the strength of parental identity alongside validated cognitive test scores in a rich British cohort study. We show that children whose mothers report either an adoption or an active rejection of the majority identity tend to score lower in cognitive tests at age 7, compared to those children whose mothers report neutral feelings about the majority identity. We find no consistent differences in test scores according to mothers’ minority identity. Our findings provide no support for education or citizenship policies which promote the adoption of the majority identity or discourage the maintenance of separate identities in ethnic minority communities