Employment shifts, economic reform and the changes in public/private sector wages in Mexico: 1987-1997

José A. Pagán, Jorge Valero Gil, José A. Tijerina Guajardo

Research output: Contribution to journalArticlepeer-review


Over the last decade, the public sector in Mexico experienced substantial fiscal reform, divestiture of public enterprises, and the elimination of many regulations affecting pay and employment. This study analyzes the changes in the public/private sector differences in wages during the 1987-1997 period. The results from analyzing microdata from the Encuesta Nacional de Empleo Urbano show that relative public sector wages increased from 1987 to 1997. Most of the relative wage increase in the public sector can be explained by increases in the price of skills and by changes in sorting across sectors. The results have important public policy implications since they suggest that public sector workers earn more and their wages have grown faster than those of their private sector counterparts. As such, policies contemplating public sector reform should take into account the effect of these measures on the inter-sectoral income distribution and the overall economic growth.

Original languageEnglish (US)
Pages (from-to)447-460
Number of pages14
JournalEmpirical Economics
Issue number3
StatePublished - Jul 2002


  • Earnings
  • Mexico
  • Public sector
  • Wage structure

ASJC Scopus subject areas

  • Statistics and Probability
  • Mathematics (miscellaneous)
  • Social Sciences (miscellaneous)
  • Economics and Econometrics


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