Income Inequality and Government Transfers in Mexico

25 Pages Posted: 7 Aug 2019

See all articles by Frederic J. Lambert

Frederic J. Lambert

International Monetary Fund (IMF)

Hyunmin Park

University of Chicago

Date Written: July 2019

Abstract

We analyze microdata from Mexico's survey on household income and expenditures (ENIGH) to study the evolution of income inequality in Mexico over 2004-16, identify its sources, and investigate how it was affected by government social policy. We find evidence of only a small decline in inequality over this period. The observed decline may be attributed to government transfers, notably targeted cash transfers (Prospera) and non-contributory pensions. In 2016, those two programs accounted for more than two thirds of the reduction in the Gini coefficient due to government transfers. Other transfer programs such as farmland subsidies (Proagro), government scholarships, and non-monetary transfers for medical expenditures have not been as effective.

Keywords: Social security, Income distribution, Demographic indicators, North American Free Trade Agreement, Development policy, inequality, poverty, social policies, Mexico, government transfer, government scholarship, non-monetary, Gini coefficient, quintile

JEL Classification: D31, H53, I38, E01, Z13, I3, J3, L31

Suggested Citation

Lambert, Frederic J. and Park, Hyunmin, Income Inequality and Government Transfers in Mexico (July 2019). IMF Working Paper No. 19/148, Available at SSRN: https://ssrn.com/abstract=3433139

Frederic J. Lambert (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Hyunmin Park

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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