Inequality, living standards, and growth: two centuries of economic development in Mexico†

Bleynat, Ingrid, Challú, Amílcar E. and Segal, Paul (2021) Inequality, living standards, and growth: two centuries of economic development in Mexico†. Economic History Review, 74 (3). 584 - 610. ISSN 0013-0117

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Abstract

Historical wage and income data provide both normative measures of living standards, and indicators of patterns of economic development. This study shows that, given limited historical data, median incomes are most appropriate for measuring welfare and inequality, while urban unskilled wages can be used to test dualist models of development. We present new estimates of these series for Mexico from 1800 to 2015 and find that both have historically failed to keep up with aggregate growth: GDP per worker is now over eight times higher than in the nineteenth century, while unskilled urban real wages are only 2.2 times higher, and national median incomes only 2.0 times higher. From the perspective of inequality and social welfare, our findings confirm that there is no automatic positive relationship between economic growth and rising living standards for the majority. From the perspective of development, we argue that these findings are explained by a dual economy model incorporating Lewis's assumption of a reserve army of labour, and we explain why the decline in inequality predicted by Kuznets has not occurred.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14680289
Additional Information:	© 2020 The Authors
Divisions:	International Inequalities Institute
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	N - Economic History > N3 - Labor and Consumers, Demography, Education, Health, Income, and Wealth > N36 - Economic History: Labor and Consumers, Demography, Education, Health, Income and Wealth: Latin America; Caribbean
Date Deposited:	08 Dec 2021 17:54
Last Modified:	16 Nov 2024 07:00
URI:	http://eprints.lse.ac.uk/id/eprint/112928

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