Minimum wages and gender inequality in the long run: Evidence from Mexico

with Enrique de la Rosa-Ramos and Valeria Rueda

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Project funded by the 2021 Arthur H. Cole Grant, Economic History Association.

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The recent global health crisis has motivated debates about what policies could achieve more socially just societies. Among the main suggested instruments are minimum wages. Recent literature has gained attention by showing that changes in minimum wages can affect gender inequality. However, these studies evaluate minimum-wage policies set at the national or state level, which constrains the identification of local-level impacts. We build on this literature by studying a non-uniform national minimum wage policy in Mexico. In 1964, 111 minimum-wage zones were established based on demographic, geographic, infrastructure, and labor-market similarities between municipalities. Before the introduction of this policy, minimum wages were autonomously determined by each municipality. We use data from the 1950, 1960, 1970, and 1980 Mexican censuses to identify whether the introduction of local minimum-wage zones had gender-specific effects on labor market outcomes and gender inequality more generally. In particular, we focus on years of schooling, educational attainment, and labor force participation. Preliminary results suggest that changes in both fertility and motherhood timing are the main mechanisms that explain the observed gendered effects of minimum wages.