Rising Inequality in Mexico: Returns to Household Characteristics and the 'Chiapas Effect'

Abstract

Using data from the Mexican National Household Income and Expenditure Surveys, we decompose the effects of returns to household characteristics and geographical variables to determine the relative importance of these factors in explaining the rising income inequality experienced in the 1984-94 period. Whereas household characteristics explain the largest share of the changes in inequality, the deteriorating conditions in the Southern region are found to account for a significant portion of rising income inequality in the country.

JEL Classification: D1, I2, I3, J1, R2