Erik Bengtsson

Senior lecturer

Income Inequality in Mexico 1895-1940: Industrialization, Revolution, Institutions

Author

Diego Castañeda Garza
Erik Bengtsson

Summary, in English

This paper, building on new archival research, presents the first comprehensive estimates of income inequality in Mexico before 1950. We use the social tables method of combining census information with group- level income data to reconstruct Mexican incomes and their distribution for four benchmark years, 1895, 1910, 1930 and 1940. The Gini coefficient for incomes is 0.48 in 1895, 0.47 in 1910, 0.41 in 1930 and 0.51 in 1940. The evidence points to inequality as a multi-faceted phenomenon. Mexican income inequality was 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 labor market 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 recognizes the importance for inequality dynamics of land ownership. The levels of inequality in the long term display rather strong persistence, in line with institutionalist arguments.

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