Abstract
AbstractThis paper empirically examines the relationship between the self-identity as Indigenous and earnings inequality in the Mexican labor market. Using Mexican Census data and a large set of wage covariates reveals the existence of an earnings penalty for self-identification as Indigenous. There is an additional and larger penalty for Indigenous persons who are fluent in an Indigenous language, regardless of Spanish language fluency. Further analyses using the Mexican Family Life Survey reveal that these earnings gaps persist after we also control for an individual’s cognitive ability. Ethno-linguistic inequality is particularly strong in smaller cities and among self-employed workers.JEL Classification:J10, J15, J31, J71, O15
Highlights
There is a vast literature in economics that addresses the issue of group differences in labor market outcomes (e.g. Lang, 1986; Neal and Johnson, 1996; Darity Jr. and Mason, 1998; Mason, 2004; Darity Jr. et al, 2006; Lang and Manove, 2011)
We find that Indigenous workers carry a significant penalty in the labor market and that this penalty increases in the level of attachment to the Indigenous group
Similar to the estimates with Census data, the results indicate that Indigenous workers suffer an earnings penalty compared to Mestizos, but this penalty is higher if these individuals speak an indigenous language
Summary
There is a vast literature in economics that addresses the issue of group differences in labor market outcomes (e.g. Lang, 1986; Neal and Johnson, 1996; Darity Jr. and Mason, 1998; Mason, 2004; Darity Jr. et al, 2006; Lang and Manove, 2011). Similar to the estimates with Census data, the results indicate that Indigenous workers suffer an earnings penalty compared to Mestizos, but this penalty is higher if these individuals speak an indigenous language. All specifications control for year, state of residence, and state of birth (1) and (3) indicates that including our measure of cognitive ability has no effect on the estimates while still indicating a positive return to cognitive ability in the labor market The estimates from these columns are in line with the results in Table 6 as Indigenous who speak an indigenous language have earnings that are on average lower than Indigenous who only speak Spanish, and this earnings gap cannot be explained by systematic differences in cognitive ability between these groups. The limited change in self-identification is unlikely to have an effect on our results
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