Scandinavian Working Papers in Economics

Lund Papers in Economic History,
Lund University, Department of Economic History

No 212: Income Inequality in Mexico 1895-1940: Industrialization, Revolution, Institutions

Diego Castañeda Garza () and Erik Bengtsson ()
Additional contact information
Erik Bengtsson: Department of Economic History, Lund University, Postal: Department of Economic History, Lund University, Box 7083, S-220 07 Lund, Sweden

Abstract: This paper, building on new archival research, presents the first comprehensive estimates of income inequality in Mexico before 1950.We usethe social tables method of combining census information with group-level income data to reconstructMexican incomesand their distributionfor four benchmark years, 1895,1910,1930 and 1940.The Gini coefficient for incomes is 0.48in 1895, 0.47in 1910, 0.41in 1930 and 0.51in 1940.The evidence points to inequality as a multi-faceted phenomenon. Mexican incomeinequalitywas shaped by the economic policies of the various regimes, as well as the growth possibilities of various sectors. The revolution of the 1910s entailed reforms(of the labormarket and of land ownership) which equalized incomes, but when these reforms were substantially reversed, inequality rose again.The developments are in line with a new branch of the literature that recognizesthe importance for inequality dynamics of land ownership.The levelsof inequality in the long term display ratherstrong persistence, in line with institutionalist arguments.

Keywords: Income inequality; Income distribution; Socialtables; Mexico; Mexican revolution; Political economy

JEL-codes: D63; E01; N36; O15

68 pages, March 6, 2020

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