Inequality reduction through self-employment under high inflation periods: the Mexican experience

Mirenitzia Cárdenas and Hector Villarreal

No 20072, Working Papers from Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey

Abstract: We propose self-employment as an explanation for the observed reduction in inequality occurring after the Mexican economic crisis of 1995. The evidence appears as a contradiction to the labour-hoarding hypothesis, which states that inequality was expected to increase because the only asset of the poor was labour. Self-employment has been an escape to inflation and staggered wages bringing as a consequence reduced inequality. Therefore, individuals will be pushed into self employment as a means of survival if they lost their jobs in the formal sector, or pulled into self employment attracted by higher potential earnings if their wages were losing purchasing power.

Keywords: self employment; self-employment; inequality; crisis of 1995; informality; labour-hoarding (search for similar items in EconPapers)
JEL-codes: E31 E32 J21 J22 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2007-01, Revised 2007-05
New Economics Papers: this item is included in nep-dev, nep-lab and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.mty.itesm.mx/egap/deptos/cee/cieds/2007-2.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.mty.itesm.mx:80 (No such host is known. )

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:egb:wpaper:20072

Access Statistics for this paper

More papers in Working Papers from Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey Contact information at EDIRC.
Bibliographic data for series maintained by Ricardo Cantú ().