Abstract
Mexico’s indigenous peoples are amongst the country’s most vulnerable and marginalized. According to the Mexican National Council for the Evaluation of Social Development Policy, the percentage of indigenous peoples who live in poverty in Mexico is nearly double that of the general population: 70.3 percent versus 38.6 percent, respectively. In this context, the present study aims to explore why the gap between the indigenous and non-indigenous populations is not closing, even after occupational differences and the rural-urban divide are taken into consideration. This paper employs Oaxaca-Blinder (OB) decomposition techniques as well as two quantile decomposition approaches with data from the 2016 National Household Expenditure Revenue Survey (ENIGH) to analyze wage differentials along the entire wage distribution and differences in the prevalence of informal employment among indigenous and non-indigenous peoples in Mexico. Understanding the underlying causes of these disparities is crucial for the design of sustainable policies that may help reduce the gap in the living conditions of indigenous and non-indigenous peoples. Findings confirm that differences in coefficients account for a significant proportion of the gap in indigenous earnings, indicating that indigenous disadvantage would persist even if human capital outcomes and access to formal employment were to improve for this population subgroup.
Highlights
Mexico’s indigenous peoples are amongst the country’s most vulnerable and marginalized
Implications This paper contributes to the existing literature on the ethnic wage gap in Mexico by examining pay disparities between indigenous and non-indigenous peoples across the wage distribution using two novel quantile decomposition techniques
The empirical evidence drawn from the wage decompositions by ethnicity shows that even though most of the ethnic wage gap can be explained by differences in human capital endowments, years of schooling, differences in coefficients account for a significant proportion of the pay gap in Mexico
Summary
Mexico’s indigenous peoples are amongst the country’s most vulnerable and marginalized. According to the Mexican National Council for the Evaluation of Social Development Policy (or CONEVAL, its acronym in Spanish), the percentage of indigenous peoples who live in poverty is nearly double that of the general population: the rates were 70.3 percent versus 38.6 percent in 2016 (CONEVAL 2016). This disparity in the prevalence of poverty raises the following questions. Psacharopoulos and Patrinos (1994) were the first to explore differences in ethnic groups’ living conditions among Latin American countries, finding a significant gap between the living conditions of indigenous peoples and those of non-indigenous peoples, as well as a positive correlation between being indigenous and living in poverty
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