Tracking wage inequality trends with prices and different trade models: evidence from Mexico
Daniel Lederman and
Raymond Robertson ()
Additional contact information
Raymond Robertson: IZA
Review of World Economics (Weltwirtschaftliches Archiv), 2018, vol. 154, issue 1, 47-73
Abstract Mexican wage inequality rose following Mexico’s accession to the General Agreement on Tariffs and Trade/World Trade Organization in 1986. Since the mid-1990s, however, wage inequality has been falling. Since most trade models suggest that output prices can affect factor prices, this paper explores the relationship between output prices and wage inequality. A Salter–Swan trade model with firm heterogeneity driven by variations in the relative price of tradable relative to non-tradable goods can explain the decline in wage inequality. The paper compares this model’s predictions with Mexican inequality statistics using data on output prices, census data, and quarterly household survey data. In spite of the model’s simplicity, the model’s predictions match Mexican variables reasonably well during the years when wage inequality fell.
Keywords: Mexico; Inequality; Labor markets; Firm heterogeneity (search for similar items in EconPapers)
JEL-codes: F66 J31 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10290-017-0291-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
Working Paper: Tracking Wage Inequality Trends with Prices and Different Trade Models: Evidence from Mexico (2016)
Working Paper: Tracking wage inequality trends with prices and different trade models: evidence from Mexico (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:154:y:2018:i:1:d:10.1007_s10290-017-0291-3
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2
Access Statistics for this article
Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann
More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().