Wage inequality and informality: Evidence from Mexico

Artikel

While several studies have documented the expansion of the informal sector and its detrimental impact on development, few have noted that informality and wage inequality tend to move together. Using Mexico as a case study, I show that between 1987 and 2002 wage inequality within informal workers accounted for over 60% of total wage inequality and that the Mexican financial crisis of the mid-1990s increased the share of informal workers and, via this, wage inequality. The results provide supportive evidence that in Mexico higher wage dispersion is one of the channels through which informality negatively affects development.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: IZA Journal of Labor & Development ; ISSN: 2193-9020 ; Volume: 5 ; Year: 2016 ; Issue: 5 ; Pages: 1-18 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; Wage Level and Structure; Wage Differentials ; Multiple or Simultaneous Equation Models: Instrumental Variables (IV) Estimation
• Subject: Wage inequality ; Informality ; Mexico

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Binelli, Chiara
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2016

Further information

• DOI: doi:10.1186/s40175-016-0050-1
• Handle: http://hdl.handle.net/10419/152424
• Last update: 10.03.2025, 11:45 AM CET