Mexican Labor Market Research Articles

Covid‐19 and its effect on formal employment in Mexico: Are there signs of recovery?

AbstractThe conditions of the Mexican labor market during the Covid‐19 pandemic went through different stages. The government first declared a quarantine that lasted for several months, the effects of which continue to be quantified. In that sense, this article answers two questions, (1) what are the changes in labor formality rates before and 2 years after the Covid‐19 pandemic began in Mexico?; and (2) are there differences in economic sectors and between genders? We use the methodology proposed by Chacaltana and McMillan to measure the variation in the labor formality rate in its two components, (1) intrasectoral; and (2) intersectoral, through 9 quarterly editions of the National Occupation and Employment Survey. The results show that in the first 2 years of the pandemic and especially during the time of confinement, labor informality was not a means to maintain household income, as had happened in other economic crises. Likewise, important sectoral effects were found, with the most affected industries being nonessential ones. Finally, gender gaps widened, with women being the most affected in the formal and informal labor market due to pre‐existing conditions that were aggravated by the pandemic.

Effects of Automation on Mexican Automotive Employment: 2013–2022

AbstractThis article analyses the empirical relationship between the introduction of automation technology—industrial robots—and the employment and wages of workers in the Mexican automotive industry from 2013 to 2022. Drawing on contemporary debates surrounding automation and technological unemployment, we describe the Mexican labour market’s conditions in the context of trade openness, the technological capabilities of the Mexican automotive industry, and the implementation of industrial robots. We examine this relationship using a random effects panel data model across 14 Mexican states, constructed with values from the Monthly Survey of the Manufacturing Industry (EMIM), the Mexican Ministry of Economy (SE), and the International Federation of Robotics. Our results suggest that adopting industrial robots correlates positively with the employment and salaries of automobile sector workers in the study period. We discuss the implications of changes in jobs and wages in the Mexican automotive industry, highlighting the consequences of technological change.

A Pandemic Crossing the Border: The Impact of COVID-19 in the US on the Mexican Labor Market

A Pandemic Crossing the Border: The Impact of COVID-19 in the US on the Mexican Labor Market

Institutional Design of Pension Systems Versus Labor Market Structure: What Matters Most?

Abstract Since the 1980s, policy makers have favored Defined Contribution (DC) pension systems as the alternative to address the unsustainability of Defined Benefit systems. While DC schemes offer benefits and economic advantages, they also present challenges and limitations. We evaluate the mandatory DC pension system for workers in the private formal sector in Mexico, introduced in 1997. We intend to determine for which workers the design of the system is effective and for which workers it is not. The Mexican labor market has high levels of informality and workers constantly flow in and out of the formal sector. Our findings support the view that workers’ personal characteristics place them in the structure of the labor market that in turn determines pension benefits. We analyze involvement with the formal sector and the pension system and identify 3 groups of pension participants that reflect the structure of the local labor market: occasional workers, frequent interruptions, and workers with high participation rates. We conclude that frictions in the labor market prevail over the good intentions of the pension design, like reducing informality and encouraging saving for retirement. Our results show that the system properly serves only 36% of affiliated workers. We explain why very few workers report behaviors consistent with high participation, and why most affiliates have insufficient participation to receive pension benefits. We shed light on the relationship between the structure of the labor market and the design of the pension system and their impact on workers’ future pension benefits.

The right to decent work in the light of SDG 8 and the technification of the Mexican labor market

El incremento del desarrollo y uso de tecnologías a escala nacional e internacional en un mundo globalizado han contribuido a que el trabajo se transfor-me al surgir nuevas formas y contextos para realizarlo, representando retos para garantizar el derecho humano al trabajo mientras se asegura que este sea decente. A partir de ello, se analizó el vínculo entre trabajo decente y el Objetivo de Desarrollo Sostenible número 8 de la Agenda 2030 considerando la tecnificación del mercado de trabajo y en particular del caso mexicano desde el enfoque cualitativo con un estudio sociojurídico descriptivo. Se identificaron características de la tecnificación del mercado de trabajo, del derecho al trabajo digno y su relación con otros derechos humanos. Concluyendo que los esfuerzos realizados deben reforzarse con la participación de actores sociales claves como sociedad, gobierno, academia e iniciativa privada que en suma permitan cumplir con las metas planteadas y garantizar derechos humanos.

Grandmothers and the gender gap in the Mexican labor market

This paper estimates the effect of childcare availability on parents’ employment probability using the timing of the grandmothers’ death – the primary childcare provider in Mexico – as identifying variation. I use a triple-difference to disentangle the effect of coinhabiting grandmothers’ deaths due to their impact on childcare from their effects due to alternative mechanisms. Through their impact on childcare availability, grandmothers’ deaths reduce mothers’ employment rate by 12 percentage points (27 percent) and do not affect fathers’ employment rate. The negative effect on mothers’ employment is smaller where public daycare is more available, or private daycare or schools are more affordable.

Social representation of nonacademic work from the perspective of company gatekeepers in the Mexican tourism sector

AbstractCooperations or transfers of the German technical and vocational education and training (TVET) system have taken place in different cultural contexts in recent decades. In Mexico, the so‐called Modelo Méxicano de Formación Dual has been adapted to Mexico's cultural conditions. Yet, it still seems to be largely unknown in society, the education system and the labour market. Attitudes, perceptions or so‐called ‘social representations’ are culturally anchored in a society and can be identified in artefacts and individual narratives. Especially social representations of company gatekeepers, such as human resources employees are focused because they regulate access in companies and to higher positions. Although this happens on the basis of organizational transition policies, decision‐making processes are shaped by culturally anchored individual perceptions. The target group of company gatekeepers from the tourism sector was interviewed within the framework of a qualitative study during eight semistructured ‘face‐to‐screen’ interviews, analysed according to grounded theory methodology. Based on social representation analysis, the Mexican labour market seems to be dichotomized. Academic titles have a high symbolic value, promising prestige. TVET options are given little focus, lack a high social esteem and are still largely unknown. Those produce técnicos, while holders of oficos often do on‐the‐job training within their families. Both depend upon their employers and have to accept unfavourable working conditions. This implies physically demanding, often gender‐specific work. Promotions are possible, even without academic degrees. Because of a lack of institutionalization, these are subjective, depending on the goodwill of company gatekeepers. Promotions are possible to a certain extent, so nonacademic workers are facing a glass ceiling.

Labor informality during the pandemic: Crisis and recovery in Mexico

Informality is a structural feature of the Mexican labor market of great quantitative and qualitative importance. However, largely due to the confinement of the population, millions of informal jobs were lost in the first months of the pandemic, leading to the relative formalization of the labor market. Subsequent percentages of informality have reached the same levels as prior to the economic crisis. In this article we analyze the evolution of informality during the first year of the pandemic and examine its determinants during this period using a logit model. The analysis illustrates some of the characteristics of the uneven recovery of the Mexican labor market.

Reduction of the wage share of income and increasingly precarious employment

The economic globalization that began in the late 1970s and early 1980s has generated job insecurity for workers. This coincides with two trends: a reduction in the wage share of income and increasingly precarious employment, both of which have been seen in most market economies since the early 1980s. This article proposes an efficiency-wage model in a demand-constrained equilibrium scenario, to explain how rising job insecurity has reduced the wage share of income and made employment more precarious. An additional virtue of this model is that it explains several features of the Mexican labour market observed in recent decades.

Technological change and the Mexican labor market: The role of tasks

Using data from ENIGH 2000-2014, this paper aims, first, to describe what is happening in the Mexican labor market with regard to the relative demand and supply of workers defined by their occupation, when occupations are classified into non-routine and routine and, within these, into cognitive and manual, based on a thorough analysis of tasks. Second, this paper tries to understand how wages and formality are related to task-biased technological change (TBTC) in Mexico. The analysis differentiates the male and female labor markets.

Work from home in Mexico: estimated using the Dingel-Neiman Model

Este estudio estima los trabajos que pueden ser plausiblemente hechos desde casa en México, utilizando la metodología propuesta por Dingel y Neiman (2020a) y la En-cuesta Nacional de Ocupación y Empleo del inegi. La estimación muestra que en México 19.6 % de los trabajos se pueden realizar desde casa, con diferencias significa-tivas entre estados, tipo de ocupaciones e incluso sectores económicos. Un resultado adicional es que personas con más altos niveles de escolaridad tienen mayores posibi-lidades de realizar trabajo desde casa, y que además está correlacionado fuertemente con el pib per cápita y el índice de complejidad económica de los estados. Esto mues-tra que los empleos más vulnerables ante el contagio por covid-19 están en sectores primarios o actividades elementales, en empleos con bajos niveles de escolaridad, lo que acrecienta las diferencias estructurales en el mercado laboral mexicano.

Informality, Gender Employment Gap, and COVID-19 in Mexico: Identifying Persistence and Dynamic Structural Effects

The objective is to analyze the impact of the COVID-19 pandemic on the dynamics of the Mexican labor market (formal-informal employment) by gender. It is built consistent micro-founded time-series from 1987:Q1 to 2019:Q4 using the Mexican urban employment surveys and estimate a VAR model linking aggregate production and each market segment. Our results suggest significant adverse effects on formal employment resulting from the COVID-19 pandemic, with lengthy job recovery for females and males. The informal sector in both genders presents a lower forecasted response to the initial production shock but substantial observed employment losses, potentially linked to structural changes in the market. In the COVID-19 crisis, the informal sector is not a substitute for formal employment losses. The complexity of this crisis suggests crafting policies to improve the easiness of the market to enhance formal job recovery while promoting gender equality. Our main contribution is to estimate the diverse employment losses by segments and a critical structural change in the labor market dynamics resulting from the COVID-19 pandemic focusing on urban employment.

La complejidad de la crisis por Covid-19 y la fragilidad del mercado de trabajo mexicano. Las brechas entre hombres y mujeres en la ocupación, la desocupación y la disponibilidad para trabajar

<p>La implementación de medidas para controlar la propagación de la Covid-19 en México ha tenido un gran impacto sobre las condiciones, características y procesos de entrada y salida del mercado laboral nacional, modificando las situaciones y expectativas de millones de personas, particularmente a las mujeres- Este trabajo busca revisar y describir la dinámica laboral antes del inicio de la pandemia y una vez flexibilizadas las medidas sanitarias más restrictivas, analizando a los hombres y mujeres en edad de trabajar que conforman la población que se encuentra ocupada (tanto formal como informal), que está desocupada, disponible o no disponible. Este artículo pretende identificar qué rasgos, tanto individuales como del hogar, determinan la pertenencia a alguna de las categorías mencionadas. Los datos provienen de cuatro fuentes y se aplican técnicas estadísticas descriptivas e inferenciales, recurriendo a la construcción de modelos de regresión logística multinomial. Los mayores cambios se observan en el aumento de la población disponible con patrones diferenciados por género, mismos que se observan en las salidas de los empleos formales e informales, así como una mayor probabilidad de estar no disponibles para las mujeres en hogares con menores de edad.</p>

Inside the Black Box of Child Penalties

As developed countries have been unable to completely close the gender wage and participation gap, recent literature has revisited the old findings regarding the existence of child penalties in the labor market. Developing countries, however, present different challenges to the ability of women to work for pay. In this paper, we produce the first formal estimation of the child penalties in the Mexican labor market, and the second in a Latin American context. Using an event study approach and an instrumental variable strategy as a robustness check, we estimate the short run impact of children on labor force participation, wages, shifts from hours at work to hours in unpaid labor at home and on transitions between the informal and formal sector. We find significant gaps between men and women in the short run impacts of children on both paid and unpaid work. Results show that the arrival of a child affects members of the extended family unevenly, reinforcing gender roles. We also find that childbirth has a greater effect on lower-income women's wages, and some heterogeneity by income deciles in the magnitude and trends of the effect of children on hours worked, paid and unpaid.

Returning to a New Mexican Labor Market? Regional Variation in the Economic Incorporation of Return Migrants from the U.S. to Mexico

In recent years, a historically unprecedented number of Mexican migrants to the U.S. returned to Mexico. Compared to previous cohorts, recent return migrants are distinct in their motivations for return, who they return with, and where they settle. Family reunification remains a pull, but more stringent enforcement of immigration law forced return as a result of deportation, and recent recessions eroded economic opportunities in the U.S. labor market, perhaps spurring others to leave. A growing number of U.S.-born migrants, many with limited experiences in Mexico, are also accompanying family members on return. Increasingly this exceptional flow of migrants is settling outside of traditional sites of emigration/return, dispersing throughout Mexico. This paper addresses how the economic incorporation of this diverse group of migrants varies across regions in Mexico over a transformational period. Using the 2000 and 2010 Mexican Censuses and a 2015 Intercensal Survey, we compare the labor market outcomes of migrants across regions of return. We find that relative earnings of recent cohorts of returnees and U.S.-born migrants are lower than those garnered by previous cohorts. The declining fortunes of individuals with U.S.-Mexico migration experience are largest in the non-traditional northern, southern/southeastern, and central regions.

Inmigración calificada y desarrollo en México. Tendencias y modalidades contemporáneas

The aim of this paper is to analyze the main changes in the volume, tendencies, and modalities of qualified migration in Mexico during the last years. This information is key to evaluate the contribution of this population sector to the development of the country. The data sources used here are the Mexican Population and Housing Censuses of 2000 and 2010 as well as the Intercensal Survey of 2015. The results obtained show a gradual increase of skilled immigration in Mexico, mainly of professionals from different fields of knowledge, but also academics, scientists, and researchers, who are mostly natives of the United States, Spain, Colombia, Argentina, and Venezuela. In terms of socioeconomic integration in the country, the data reveal that the vast majority of this skilled labor is incorporated into the Mexican labor market as employees in the education sector (public or private) and the maquiladora and automotive industries as well as personal services.

Unemployment transitions in the mexican labour market and the role of job search channels

This study examines the overall effects of a set of personal characteristics, search channels and financial variables on the probability of transitioning from unemployment to employment. Using the National Occupational and Employment Survey 2005-2015 (ENOE in Spanish). There seems to be a positive and strong correlation between being formally employed and transitioning to a formal employment in period t + 1. There is a “wait unemployment”, because those with lower levels of education experience more transitions relative to more educated individuals.There seems to be a presence of a “scarring effect” which is picked up when introducing the duration of weeks of job search in the estimation, and means that unemployment spells are positively associated with remaining unemployed. Finally, women seem to benefit more when using different types of search channels such as uploading or replying a job offer online and using newspapers or classified ads to get a job.

Implementing a regression discontinuity design to explore the heterogeneous effects of obesity on labour income: the case of Mexico

This study aims to explore within-country heterogeneity in the causal relationship between body mass and labour income. We focus on Mexico, which is an emerging country where overweight is predominant and hunger has become marginal. Based on the working-age population from the Mexican Family Life Survey (2002–2012), we use a regression discontinuity design to test for significant discontinuities along the body mass-income relationship. More specifically, we investigate the presence of income gaps along the body mass distribution. Our findings suggest that the overweight status is not particularly penalised in the Mexican labour market. By contrast, the obesity status decreases hourly wages by about 15%. Regarding heterogeneity, obesity-related wage penalties are stronger for female than male employees and higher in service employments, urban areas and the latest survey. We conclude on a co-occurrence of pro- and anti-fat social norms in emerging countries. Our results might be generalised to other middle-income economies with similar nutritional patterns where hunger is marginal and overweight predominant.

Downward Wage Rigidities in the Mexican Labor Market: 1996–2011

In this paper, we provide evidence of the existence and evolution of downward real and nominal wage rigidities in Mexico in the period 1996–2011, which was characterized by a reduction in the level and volatility of inflation. Our results suggest that, throughout the period, a much larger fraction of private sector workers, who stay in the same job from one year to another, are subject to downward real wage rigidities than to nominal ones. Nevertheless, the relative prevalence of nominal rigidities increases slightly as inflation decreases.

Efectividad de los mecanismos de búsqueda de empleo en el mercado laboral mexicano

El proceso de búsqueda de empleo y las estrategias implementadas son un factor clave para obtener un trabajo. El objetivo de este artículo es estimar el grado de efectividad de los mecanismos de búsqueda de empleo y la influencia de las características sociodemográficas de los individuos en la elección de las estrategias de búsqueda, tomando como caso de estudio a México durante el primer trimestre del año 2017. A partir de información de la ENOE se emplean herramientas de estadística descriptiva e índices para determinar la efectividad de los mecanismos de búsqueda. A través de un modelo de elección binaria, se analizan los efectos de incluir variables sociodemográficas sobre los mecanismos de búsqueda y la probabilidad de encontrar empleo. Se encontró que el mecanismo de búsqueda de empleo más efectivo es acudir a familiares, amigos y conocidos.