Has Globalization Deepened Income Inequality in Mexico?

Fernando Borraz and José López-Córdova ()

Global Economy Journal, 2007, vol. 7, issue 1, 57

Abstract: In this paper we use household survey data to study the evolution of income distribution in Mexico over the last decade, a period of rapid integration to the global and North American economies -- "globalization" for short. We measure differences in income inequality, over time and across Mexican states, and relate them to regional differences in the degree of globalization, controlling for the potential endogenous relationship between the two. We use the percent of state employment in exporting firms or in firms with foreign capital participation, as well as data on state trade, as proxies for integration to the world economy. Our findings strongly indicate that globalization has not raised income inequality in Mexico. On the contrary, we present compelling evidence showing that income distribution is more equitable in states that are more closely linked to the world economy and that those states exhibit larger declines in inequality. We also find some statistical evidence suggesting that deepening globalization results in reduced inequality, although our results are sketchier on this point, perhaps because such effect is only observable in the long run. As a potential explanation of why globalization might improve the distribution of income among Mexican households, we show that states that are more integrated to the world economy offer better work opportunities for low-skilled women relative to more educated female workers.

Keywords: Mexico; income inequality; globalization; trade; foreign direct investment; NAFTA (search for similar items in EconPapers)
Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
https://doi.org/10.2202/1524-5861.1237 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Has Globalization Deepened Income Inequality in Mexico? (2004)
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:bpj:glecon:v:7:y:2007:i:1:n:6

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/gej/html

DOI: 10.2202/1524-5861.1237

Access Statistics for this article

Global Economy Journal is currently edited by Jannett Highfill

More articles in Global Economy Journal from De Gruyter
Bibliographic data for series maintained by Peter Golla ().