Minimum wages and wage structure in Mexico

David Fairris, Gurleen Popli and Eduardo Zepeda ()

MPRA Paper from University Library of Munich, Germany

Abstract: Instead of merely setting a lower bound on the wages of formal sector workers, minimum wages serve as a norm for wage setting more generally throughout the Mexican economy. Our results suggest that wages are commonly set at multiples of the minimum wage, and that changes in minimum wages influence wage changes across the occupational distribution. Moreover, our findings suggest that these normative features of minimum wages have their greatest impact on the mid-to-lower tail of the wage distribution, including the informal sector of the economy. Thus, the results lend support to the view that declining real minimum wages and stabilization programs that strengthened the link between wage levels, wage changes, and minimum wages, might account for a portion of the growing wage inequality in Mexico over the period of the late 1980s and early 1990s.

Keywords: wage distributions; minimum wages; wage inequality; Mexico (search for similar items in EconPapers)
JEL-codes: J31 J38 (search for similar items in EconPapers)
Date: 2006, Revised 2006
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Minimum Wages and the Wage Structure in Mexico (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:400

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