Labour Markets and Fiscal Redistribution 1989-2014 by Raymundo Campos-Vazquez, Nora Lustig and John Scott by Inequality in the Developing World edited by Carlos Gradín, Murray Leibbrandt, Finn Tarp (2021)
Income inequality in Mexico increased between 1989 and 1994; between 1994 and 2006, inequality declined; and, between 2006 and 2014, inequality was again on the rise. We apply decomposition techniques to analyse the proximate determinants of labour income inequality and fiscal incidence analysis to estimate the first-order effects of taxes and social spending on the distribution of income. The key component that underlies the ‘rise-decline-rise again’ pattern was the evolution of returns to skills.
