Minimum Wage and Job Transitions in Mexico

Francisco Cabrera-Hernandez () and Duval Hernández, Robert ()
Additional contact information
Francisco Cabrera-Hernandez: Department of Economics, Centro de Investigacion y Docencia Economicas
Duval Hernández, Robert: Open University of Cyprus

No 18443, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper analyzes the labor market effects of Mexico’s 2019 minimum wage reform, which doubled wages in northern border municipalities. Using other northern municipalities with smaller wage adjustments as a comparison group, we examine changes in worker transitions across employment states. The reform lowered quit rates among formally employed workers but increased them for certain informal workers. Although the wage hike did not raise overall layoffs, it altered their composition: laid-off formal workers became more likely to transition into informal employment, while new formal hires increasingly came from previously employed informal workers.

Keywords: minimum wage; employment transitions; Mexico (search for similar items in EconPapers)
JEL-codes: J3 J38 J63 O10 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-dev, nep-iue, nep-lab and nep-lma
References: Add references at CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp18443.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp18443

Access Statistics for this paper

More papers in IZA Discussion Papers from IZA Network @ LISER Contact information at EDIRC.
Bibliographic data for series maintained by Mark Fallak ().