Income Inequality and Government Transfers in Mexico

Frederic Lambert and Hyunmin Park

No 2019/148, IMF Working Papers from International Monetary Fund

Abstract: We analyze microdata from Mexico's survey on household income and expenditures (ENIGH) to study the evolution of income inequality in Mexico over 2004-16, identify its sources, and investigate how it was affected by government social policy. We find evidence of only a small decline in inequality over this period. The observed decline may be attributed to government transfers, notably targeted cash transfers (Prospera) and non-contributory pensions. In 2016, those two programs accounted for more than two thirds of the reduction in the Gini coefficient due to government transfers. Other transfer programs such as farmland subsidies (Proagro), government scholarships, and non-monetary transfers for medical expenditures have not been as effective.

Keywords: WP; income; government; government transfer; inequality; poverty; social policies; Mexico; household income; income quintile; net market income Gini coefficient index; inequality in Mexico; self-employment income; income source; Personal income; Income inequality; Income distribution; Pensions; North America (search for similar items in EconPapers)
Pages: 24
Date: 2019-07-11
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (2)

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